Plasma, the new blockchain from Tether’s sister firm Bitfinex, is off to a strong start.

Users have deposited over $4 billion worth of crypto to protocols on the network since its Thursday launch. It’s now the eighth-largest blockchain by DeFi deposits, per DefiLlama data.

Plasma’s token incentives are playing a significant role in drawing capital, River, Plasma’s pseudonymous DeFi lead, told DL News. “We predicted a good reception at launch, but the feedback from the market and initial success has surpassed even our most optimistic scenario,” he said.

Those who lock up assets in Plasma’s lending vaults and at partner DeFi protocols can earn XPL ($0.25), the new network’s native token.

Such strategies have proven effective in drawing in deposits, but can backfire once the incentives stop.

Plasma’s partnerships with top Ethereum DeFi protocols such as Aave, Veda, and Fluid have also contributed to its swelling deposits. “We focused every team towards ensuring the cheapest USDT ($1.00) borrow rate in the market,” River said. USDT is Tether’s US dollar stablecoin.

Plasma is one of several blockchains vying to compete in the stablecoin payments sector.

Its competitors include Tempo, a soon-to-be-launched blockchain built by payments giant Stripe and crypto venture firm Paradigm, and Arc, a planned blockchain from Circle, the firm behind the USDC ($1.00) stablecoin.

Plasma initially aims to cater to users exposed to shaky local currencies, providing an easy way for them to hold and spend US dollar stablecoins, Paul Faecks, Plasma’s CEO, previously told DL News.

It also offers users zero-fee transfers on USDT, the only blockchain to do so.

Bitfinex was founded in 2012 and was one of the first professional platforms built for crypto trading.

2,300% gain

Plasma’s initial success has helped drive up the price of XPL.

It launched at the same time as the network, and has jumped 30% since then. It now trades at $1.20, which equates to a fully-dilluted valuation of almost $12 billion.

That’s a mammoth 2,300% increase from the $500 million valuation offered to those who invested in the project’s public token sale on Sonar, a token sale platform, in June.

It’s also an eye-watering 324-fold return for those who invested in Plasma’s seed round on Echo, an early stage investment platform, in November.

Only some investors have been able to realise their gains so far.

Participants from outside the US were able to sell their XPL as soon as the network went live. Investors in the States and those who invested in the seed round are subject to a 12-month lockup, however.

With other stablecoin-focused blockchains also preparing to launch, Plasma will have to stay nimble to compete.

“We have a lot planned in the coming months from native applications, and key strategic partnerships with other blue-chip applications,” River said.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.