This Forgotten Altcoin Rallyed with the Statements of the Ethereum Inventor!

Ethereum co-founder Vitalik Buterin has surprisingly revived interest in Plasma, which was once a dominant layer 2 scaling solution for ETH. Here are the details…

Statements of the Ethereum inventor attracted attention

In a Twitter post on November 14, Buterin expressed the need to reconsider Plasma for teams currently developing zero-knowledge Ethereum Virtual Machines (EVMs). Despite the emergence of more cost-effective and secure alternatives such as Optimism and zero-knowledge (ZK)-rollups, Buterin argues that Plasma remains an underappreciated design area with significant potential.

Rollups remain the “gold standard,” according to Buterin, but Plasma could serve as a valuable security upgrade for chains that would otherwise be Validium. Similar to Plasma, Validiums move data and computation off-chain but use ToM proofs to verify transactions. The slower fraud proofs used by Plasma have been a limitation in the past, but Ethereum inventor Buterin suggests that recent advances in ToM proofs, such as validity proofs, address these concerns and make Plasma a more viable scaling solution.

OMG price jumped

The Ethereum layer 2 ecosystem is expected to evolve through various technological approaches, with iterations such as Minimal Viable Plasma, Plasma Cash, and Plasma Cashflow stemming from the original Plasma concept. While some projects, such as Polygon Labs, initially implemented Plasma in 2019, the movement away from Plasma gained momentum in part because Plasma Group halted work on ETH-based scalability in January 2020.

Interestingly, Buterin revisiting Plasma had an immediate impact on the market, particularly OMG Network’s native cryptocurrency OMG, which surged 28.6% to $0.78 within three hours of the announcement. However, the token later fell to $0.67, a decline of 14.3%. So, Buterin’s recognition of Plasma’s potential triggered a six-month high for the OMG token.

OMG benefited from Plasma

This resurgence in interest highlights the crypto community’s ongoing efforts to address scalability and security issues on the Ethereum network. OMG Network, formerly OmiseGO, initially benefited from Plasma’s promises during its 2017 ICO. But since then, the landscape of layer-2 scaling solutions has evolved significantly with newer rollup technologies eclipsing Plasma.

Despite the recent rise, the OMG token is still a long way from its all-time high of $25.4 in January 2018. The token’s decline is attributed to the growing popularity of alternative scaling solutions such as Arbitrum, Optimism, and various zero-knowledge rollups such as Mina and Dusk Network, which have gained market attention and adoption.