An overview of Plasm

8 min readJan 13, 2021

Plasm is a smart contract Layer1 chain with the compatibility of EVM and WASM. In order to improve chain scalability, there is also a Layer2 solution. As is well known to those who have learned that Polkadot parachain will have their own contract functions in the future, but Plasm focus on the development of general smart contract infrastructure ( both Layer1 + Layer2) to provide an infrastructure with good scalability for dApp developers.

Plasm is creating an ETH2.0 on Polkadot!

As we all know Polkadot’s relaychain does not have smart contract functionality. DApp developers who want to develop applications based on Polkadot must action a parachain or choose a smart contract parachain to deploy. The former has high development costs for the developer, and the cost of bidding for a slot is also very expensive, with some project estimating it will need around 3 million DOT. Therefore, the best way to deploy dApps is based on a smart contract parachain. Due to Plasm’s excellent scalability, it is a great choice for dApp developers to deploy smart contracts on Plasm.

The Problems Plasm Solves

Polkadot is the blockchain of the blockchain, so the Polkadot relay chain belongs to the Layer0 blockchain, the parachain on Polkadot belongs to the Layer1 blockchain, and Plasm is designed as a parachain on Polkadot. It mainly solves the problem of Layer 2, that is, scalability and interoperability problems. Plasm is the only network that supports Layer 2 scalability technology from the beginning. When it comes to Layer 2, it not only means higher transactions per second but also cheaper fees and higher flexibility. At present, the transaction fee of using Ethereum is very expensive, and the fee for a transfer is basically $30 to $40.

Scalability

Due to the decentralized consensus mechanism, the blockchain cannot be extended by design. TPS (transactions per second) is much smaller than a centralized database, and there is an upper limit on the data that can be stored in each block. Therefore, users on the network may notice that their transactions are unconfirmed or pending for a long time, resulting in a poor user experience. For smart contract developers, this will become a key bottleneck.

The Plasm network Layer2 solution can solve the scalability problem, which means that using Plasm to deploy dapp will：

Higher Transaction Per Second (TPS)

2. Lower transaction cost

3. Faster finality

Interoperability

Many different blockchains exist but few have interoperability as a feature. To move “value” from Bitcoin to Ethereum, we need a centralized exchange. Polkadot is a sharded protocol that enables blockchain networks to operate together seamlessly.

Plasm Network is compatible with Polkadot. By connecting Plasm Network to Polkadot, we will have true interoperability.

Innovation of Plasm

Operator Trading

Operator Trading is a mechanism to buy and sell Plasma applications. This is similar to M&A. With the dApps Rewards mechanism, operators have the potential to benefit greatly. A developer may want to assign an operator for chain maintenance and administration or other various use cases. Operators will give their rights to opponents who give a value that seems reasonable to the value given to them. Those who have been granted the rights of the operators can receive the buyout. This mechanism assumes that new off-chain markets will be created.

dApps Reward

dApps Rewards is a reward mechanism for developers or administrators of smart contracts. 50% of Plasm Network’s staking reward goes to application developers who have enhanced the value of the Plasm Network. Plasm allows the assignment of a smart contract administrator, called an “operator.” “Operators” can be “Nominated” by other dApps “Nominators.” As shown below, the operator of the smart contract receiving many nominations can receive a newly minted PLM token from the chain.

Dapp nominators can get rewards proportional to their staked amount.

Also, the operator can get a reward proportional to the ratio of the stake of the smart contract owned by oneself to the stake of the smart contract. This creates an incentive for the nominator to stake on smart contracts that would simply increase the value of the token. Operators can also receive semi-permanent rewards by receiving stakes on smart contracts managed by themselves. This is one solution to the difficult problem of monetizing application developers (administrators) on the chain.

Lockdrop

Lockdrop is a new low-risk economic incentivization mechanism, using opportunity costs rather than legal tender (or assets) as collateral. Plasm uses the mechanism of multiple lockdrop to issue tokens with monetary value.

Multiple lockdrop iterations have two advantages:

It prevents uneven token distribution and discourages ‘whales’ if initial offering purchases are low.
Second, it allows for code results to be observed so that the team can ensure that the Plasm Network can scale and be decentralized. The security and integrity of a blockchain rely on the distribution of nodes and token holders. It is not desirable to hold the security after the official launch at Stake. Repeating the lockdrop three times allows us to understand the distribution of tokens among the holders, also reducing maintenance costs for fixing issues and further risks that follow. This aligns with our goal of making Plasm Network a complete public blockchain.

Plasm has a total of 3 lockdrop. As of the post, Plasm has complete two lockdrops, and both lockdrops use the opportunity cost of Ethereum, which is to obtain PLM tokens by locking ETH. At present, 150,000+ ETH (currently valued at approximately $150 million) has been locked, and 14.4722 billion PLM has been issued. The total number of tokens will not be set at the genesis, and the total number of tokens will be determined after the third lockdrop ( lock DOT for action the parachain slot ). In addition, after the third time, another 35% of the tokens will be minted for community, market, grant, etc.

Use case of PLM token

Plasm Network’s token ecosystem is built into Polkadot. Therefore, this document includes the same formula and values as Polkadot.

PLM has four main roles:

Staking for consensus, rewards for validators and nominators
Transaction fee used to prevent harmful behaviors
Block rewards for dApps operators; sustainable reward designed for applications
Good/bad voting, dApps operators

PLM is intended to be used as a liquidity token. Tokens are issued through multiple Lockdrops to prevent zero-value collateral and increase the number of token holders. PLM tokens are expected to be operated at the ratio of 1：1 = Staking：Liquidity.

However, in a real economic environment, when the dApps Staking function is enabled, the liquidity ratio will gradually decrease. When Plasm becomes a parachain, it is expected that more than 75% of the tokens will be locked, because the participants of the third Lockdrop have a vesting period, that is, the tokens will be gradually unlocked within a certain period of time.

Plasm network follows Polkadot’s NPoS mechanism. In an ideal state, the maximum inflation rate of the network is about 17%, of which the inflation rate of the validator is 10%, and the inflation rate of smart contract operators is about 7%. The inflated tokens are used to reward dApps and validators and nominators who protect the security of the chain. Therefore, there are two types of staking operations in the Plasm network:

validator staking (NPoS mechanism )
smart contract staking (dApps reward mechanism)

The rewards of both types of staking are proportional to the staked amount. Users who staking on validators/smart contracts are collectively referred to as nominators. The ideal ratio of validator staking tokens and smart contract staking tokens is 5:1.

Current progress

mainnet

Plasm has launched the mainnet, but it was initially launched as a PoA network. The network has authorized 10 validators, and they will be rewarded by the network on average. Plasm will convert the network to NPoS before the Kusama parachain auction (expected in February) and will convert the previous validator to the collector after bidding for the slot.

PLM token

PLM is a mainnet token, not an erc20 token. A total of 22.27 billion PLM has been issued through two LockDrop and an additional 35% (for teams and communities). However, since the Plasm network is still in the PoA stage, and to prevent fraud in the secondary market, the Plasm network uses a sudo module to manage the PLM transfer function, and transfers are currently not available. The token transfer function is expected to resume before the Kusama slot auction.

Rococo

Plasm has become the first parachain on Rococo V1, the Polkadot’s first testnet parachain. This is a major step for Plasm Network’s developments in becoming an official Polkadot parachain later this year. This is the first WIN for all of us in 2021!

Lockdrop

Currently, two lockdrop have been completed, and nearly 150,000+ ETH has been locked-up on the Plasm network. The third lockdrop will be used for the Polkadot Parachain slot auction. The third Lockdrop has not yet started, PolkaWorld will continue to pay attention and share the progress of the Plasm slot auction with you in the first place.

Grant

As of the time of posting, Plasm has received 6 grants from the Web3 Foundation, and is currently Implementing the fifth and sixth grants.

Plasma modules for Substrate ( GitHub )
ink! Playground ( GitHub )
Plasm Chain + OVM Implementation ( GitHub )
ECDSA for Polkadot JS ( GitHub )
Hardware ECDSA for Polkadot JS ( GitHub )
ZK Rollups Pallet ( GitHub )

Team

Sota Watanabe : CEO of Plasm Network. Early on, he worked at Chronicled, a blockchain startup company in San Francisco, and also worked at SoftBank Group. After returning to Japan, he became a blockchain researcher at the University of Tokyo. Later founded Stake Technologies. Plasm Network is an open-source project of this technology company.

Takumi Yamashita: Plasm Network CTO, nominated by the Japanese government as one of the 16 best engineers under 25 years old in 2018, Master of Computer Science from the University of Tokyo.

Alexander Krupenkin: One of the core developers of Plasm Network, a master of ITMO computer science, has been involved in Bitcoin since 2009, and joined in the open-source development of Ethereum in 2015. He is also one of the early contributors to the Substrate.

The Plasm team also includes two doctoral engineers Tomomasa Matsunaga and Yoshinobu Shijo from the University of Tokyo and Osaka University, the IPhO Physics Olympiad world silver medalist Task Ohmori, the early Polkadot ambassador Hyungsuk, and Hoon Kim and other ACM-ICPC competition medal winners.

sms: a software engineer at Plasm, and is also responsible for communication with the Chinese community market.

Come join Plasm community!

For further information, follow Plasm on Twitter and Telegram.

And lastly, the Plasm team is hiring a lead engineer! If you are interested, please contact us at info@stake.co.jp

About PolkaWorld

PolkaWorld is Polkadot’s Chinese community. We have gathered more than 30,000 Polkadot fans. It is the world’s largest Polka Chinese community and the only community that has received the Web3 Foundation Grant.PolkaWorld is committed to popularizing Polkadot technical knowledge, training Substrate developers, and supporting Polkadot ecological entrepreneurs, thereby promoting the development of China’s Web3.0 ecology.

Follow PolkaWorld on Twitter：@polkaworld_org

Learn more about：

PolkaWorld Interview Program（https://polkaworld.medium.com/polkaworld-interview-program-94d3be53ea94）, aiming to help Polkadot community projects to be better heard in China.

Substrate Entrepreneur Camp（https://polkaworld.group/en/substratecamp/）, which is to help the birth and growth of Polkadot’s eco-innovative products.