When Plasma's $XPLtoken was issued a month ago crypto investors were chomping at the bit to buy a slice of the new blockchain that was built for stablecoins.

But despite stablecoins being a dominant theme throughout this bull cycle, Plasma failed to live up to the hype; with $XPLnow having lost more than 80% of its value since September's short-lived high of $1.67.

$XPLcurrently trades at $0.309 after sliding by 13.6% in the past 24 hours alone, prompting around $8 million in liquidations.

It now risks falling out of the top 100 crypto tokens entirely with a market cap of just $550 million, with the 100th largest maintaining a market cap of $540 million.

What went wrong?

Investors will be wondering where it all went wrong. Plasma was one of the most hyped projects of the year, backed by the likes of Bitfinex, Framework Ventures and Jordan Fish (Cobie) across two funding rounds that saw it raise $24 million, according to Icodrops.

Then there was the public sale, where it raised $50 million after selling 1 billion tokens for $0.05 each. These buyers remain well in profit but the same can't be said for those who purchased $XPLon exchanges when it went live in September.

Sentiment plummeted straight after debut with allegations that the Plasma team were engaging with market makers to short the $XPLtoken, effectively locking in profits.

$XPLtoken performance (Coinglass)

Plasma founder Paul Faecks refuted those claims in a tweet that read: "No team members have sold any $XPL. All investor and team $XPLis locked for 3 years with a 1 year cliff."

"We have not engaged Wintermute as a market maker and have never contracted with Wintermute for any of their services," he continued. "We have the same information as the public on Wintermute's ownership of $XPL."

Veteran trader Alex Wice challenged Faecks on his tweet, writing: "Did you engage with another market maker to short xpl, effectively "locking in" profit? Yes or no," to which Faecks did not reply.

Nonetheless, relentless sell pressure remained and muted demand has meant the $XPLtoken continued to form new lows.

Onchain metrics

The Plasma blockchain was designed to be the blockchain for stablecoins, offering zero-fee transfers and high throughput.

In practice, it has become a lending protocol; the Plasma website has one "lending vault" which currently has $676 million in total value locked (TVL), offering around 8% in annual returns.

Plasma lending vault (Plasma)

At the moment the $XPLtokens main use case is to reduce fees for non-stablecoin transfers, with $XPLstaking and delegation being planned for Q1 of 2026.

The Plasma website boasts figures of more than 1,000 transactions per second (TPS), while in reality the Plasma block explorer shows a current figure of just 14.9 TPS, in part due to the lack of activity taking place.

To its credit, Plasma claims to offer sub-second block times, and on the surface new blocks are being created every second, despite many of those blocks containing just a handful of transactions.

What next for $XPL?

The $XPLtoken will likely provide more of a use case at the start of 2026 when staking becomes active. But until then investors need a stimulus to drive demand, and failure to do so could well see $XPLfade into obscurity as hype continues to fade.

$XPLhas become a double-edged sword, one of the reasons for owning $XPLis to reduce transaction fees, but for a blockchain that is designed to offer zero-fees on stablecoin transfers and minimal fees on other tokens, there is no need to own $XPLas using the chain is already very cheap.

Perhaps demand will increase once Plasma rolls out its "Plasma One" card, but for the time being it remains a desperate plight in terms of price action and relevance.

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