Plasma has established a direct partnership with Tether, securing access to USDT at a wholesale rate that is 2-3 basis points lower than its competitors. This arrangement, facilitated by an investment from Tether CEO Paolo Ardoino, provides Plasma with a significant and sustainable cost advantage.

The favorable terms of the deal allow Plasma to offer a highly competitive yield of approximately 10% on its platform. A substantial portion of this yield, around 3.5%, is directly attributed to Tether passing through its T-bill yields at cost. This unique cost structure creates a formidable competitive moat that is difficult for other players in the stablecoin market to replicate.

The strategic investment from Ardoino underscores the significance of the partnership and its potential to reshape the stablecoin landscape. Competitors such as Ethena and World Liberty Finance, which pay full market rates for their USDT access, will likely face challenges in matching the economics offered by Plasma.

This development comes as Plasma builds out its vision for a USDT-native financial ecosystem. The company has raised $24 million from prominent investors, including Peter Thiel, to develop a Bitcoin-based blockchain optimized for stablecoin trading with zero-fee transactions.