Products FM Marketplace
Multi-dealer marketplace
FM Liquidity Match
Saas for electronic trading
FM White Label
B2B White Label Crypto Trading Platform
FM Pulse
Real-time market data analytics
FM Space
Counterparty selection
Clients Banks & brokers
Neobanks, crypto-native and FX brokers
Payment providers
PSPs, payment gateways, on/off ramp
OTC desks
Crypto trading desks, retail platforms
Buy-side
Passive funds, hedge funds, asset managers
Liquidity providers
Market makers, proprietary shops
Prime brokers
Agency and risk-principle brokers
Stablecoin issuers
Next gen of fintech
Company About Careers Blog Media kit Referral Legal Imprint Operating rules Privacy Policy Risk Disclosure Support Contact us

For Customers Log in

Contact Us

Plasma Meaning

Plasma is an early Layer 2 scaling solution for Ethereum, first proposed by Vitalik Buterin and Joseph Poon in 2017. The idea was to create child chains that sit on top of the main Ethereum parent chain. These child chains could handle thousands of transactions per second, only reporting back to the main chain periodically with a snapshot of the current balances.

This off-chain processing was the first major attempt to solve Ethereum’s high gas fee problem.The technical innovation of Plasma was its exit mechanism. If a child chain became corrupt or malicious, users could withdraw their funds back to the main Ethereum chain by providing a fraud proof.

This ensured that users' funds were secured by Ethereum, even if the Layer 2 operator tried to steal them. This security guarantee is what distinguished Plasma from simple sidechains, which have their own independent security models.However, Plasma faced a massive technical bottleneck known as the data availability problem.

For a user to exit the chain, they needed to have proof of every transaction that ever happened on that child chain. If the operator withheld the data, the user couldn't prove they owned their funds, leading to a mass exit crisis that could clog the main Ethereum chain.

This complexity made Plasma very difficult to build for general-purpose smart contracts.Today, Plasma has been largely superseded by rollups. Rollups solve the data availability problem by posting a compressed version of every transaction directly to the main Ethereum chain, making them much safer and easier to use.

While pure Plasma is rarely used now, its design philosophy lives on in modern validiums and hybrid Layer 2s. It remains a crucial chapter in blockchain history, teaching the industry hard lessons about the trade-offs between scalability and security.

← Back to Glossary

Explore our services

Providing liquidity in the cryptocurrency market?
Authorize on our platform and do it smarter with FM Pulse.

FM Marketplace

A reliable and high-performance crypto liquidity marketplace for institutions and businesses.

Learn more

FM White Label

Launch your fully branded B2B crypto trading platform in under one week.

Learn more

FM Liquidity Match

Crypto OTC-as-a-Service infrastructure for enhanced monetization and trade control.

Learn more

Scale your business, leave the hard work of your trading needs to us

Reduce your integration costs and operational risk across multiple access points with our platform

Get started

Important Disclaimer:

Finery Markets BVI Limited (“Finery Markets”) provides software, technology infrastructure, and related Information and Communication Technology (ICT) services on a Software-as-a-Service (“SaaS”) basis. Finery Markets acts solely as a software vendor and does not operate a trading platform, does not intermediate, match, execute, clear, or settle transactions, and does not engage in any activities that would require regulatory authorisation under applicable laws.

Finery Markets’ software is non-custodial and is provided exclusively to licensed institutional entities that act as independent operators of their own environments. All counterparties are solely responsible for establishing and maintaining their own bilateral trading and settlement relationships. Finery Markets is not a party to any such arrangements and assumes no responsibility for the conduct, verification, or compliance obligations of any users of the software.

Nothing on this website shall be construed as a financial promotion, investment advice, or an offer to engage in regulated activities. Access to and use of the software is strictly limited to clients who have entered into a software licensing agreement with Finery Markets. Persons located in jurisdictions where such access is restricted should not rely on this website or any of its contents.

Additional notice to UK visitors: This website and associated communications are not intended to constitute a financial promotion under The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) and related guidance. Access to services provided by Finery Markets is limited to regulated entities, professional clients and eligible counterparties as set out by the Financial Conduct Authority. UK users are not permitted to use this website for the services of Finery Markets if they don't fall within these categories.