Kaia: With the backing of two major Asian social giants, Line and Kakao, and the potential of 250 million users ready to go, can it replicate the myth of TON?

1. Overview of Kaia's Background

1.1 Project Introduction

1.1.1 Establishment and Development History

On January 16, 2024, Asia's two leading blockchain platforms, Klaytn and Finschia, announced the launch of a unified mainnet plan. Such a large-scale project merger is very rare in the Web3 ecosystem, especially considering that these two mainnets originate from South Korea's Kakao and Japan's LINE. On August 29, 2024, the merged Kaia mainnet officially went live. By combining their respective ecosystems and assets, Kakao and LINE plan to create a giant blockchain in Asia and gradually lead the global Web3 market.

Sam Seo, the chairman of the Kaia Foundation, holds a Ph.D. in high-performance computing and has been deeply researching Bitcoin and blockchain since 2017. He previously served as CKO at KrustUniverse, leading the development and operations of Klaytn. Additionally, he was the Chief Technology Officer at GroundX(, Kakao's blockchain subsidiary ), and worked as an Assistant Computer Scientist at Argonne National Laboratory.

The joint support of Kakao and LINE has injected strong momentum into the development of Kaia. Kakao has a usage rate of 96% in South Korea and has a significant impact in Vietnam. LINE is beloved by users in Japan, Taiwan, and Thailand. Together, the potential user base of Kaia exceeds 250 million, significantly enhancing its global coverage. This vast user base is expected to greatly increase the popularity and acceptance of blockchain technology in the East Asian market, laying a solid foundation for the large-scale application of blockchain technology, and subsequently creating a large-scale and vibrant Web3 ecosystem in Asia. Other investors in Kaia include Hashed and IDG Capital.

1.1.2 Important Timeline

• January 16, 2024: Klaytn and Finschia announce merger plans
• August 29, 2024: Kaia mainnet officially launched

1.1.3 Kakao and Klaytn

Kakao Talk is one of the most popular instant messaging applications in South Korea, with nearly 49 million monthly active users in Q3 2024, 90% of whom are from South Korea. The company has more than 17k employees, and its operating profit in Q3 2024 was 130.5 billion KRW ( 934.8 million USD ), a year-on-year increase of 5%. The platform division, including Kakao Talk, achieved growth, with revenue increasing by 7% to reach 943.5 billion KRW ( 201.0763 million USD ).

Klaytn has been designed for DApp developers and enterprises from the very beginning. This ecosystem allows developers to unleash their creativity and enhance user experiences. This provides a strong technical foundation for Kaia. Klaytn has accumulated a trading volume of $376 billion, with over 29 million Web3 wallet users, more than 240k community members, and an ATH Onchain TVL exceeding $1 billion. Additionally, it has a strong influence in Singapore and Vietnam.

The Korean market has always been crypto-friendly, with its local exchange Upbit becoming a leading exchange in the crypto industry. Web3 projects take pride in being able to log into Upbit. Against the backdrop of the entire Korean user base trading cryptocurrencies, the potential of Kaia is undoubtedly exciting.

1.1.4 Line and Finschia

LINE, as the most popular communication platform in Japan, covers 70% of the Japanese population and also dominates markets in Thailand, Taiwan, and others. Japan has 92 million monthly active users, Thailand exceeds 51 million users (, making it the most popular social platform in Thailand ), Taiwan has 21 million users, and the Indonesian market has 13 million users. This high level of user penetration provides a solid foundation for its advertising, payment, and content services. The 2024 Nielsen LINE usage behavior survey shows that 92.1% of Taiwanese people aged 15-65 used LINE in the past seven days, with nearly half of the users being heavy users, checking LINE for messages an average of 14 times a day.

LINE's ecosystem integration capabilities are particularly outstanding. Users can consume a wealth of content products on LINE, including over 300,000 comic books and 9 games that integrate social interaction. This diversification of features gives LINE a significant advantage in maintaining user engagement. An average usage time of over 4 hours per week highlights its irreplaceability in users' daily lives.

This comprehensive ecosystem provides Kaia with unique advantages. LINE's users are highly concentrated and active, and its integrated advertising and payment features allow brands and services to precisely reach their target audience. In addition, LINE's localized strategy ensures that the platform's content closely matches users' cultural needs, creating an efficient pathway for Kaia's localized promotion.

LINE's payment ecosystem showcases its potential in the blockchain economy. With 40 million monthly active payment users and an annual transaction volume exceeding $12 billion, LINE Pay has provided users with a seamless digital payment experience. This payment infrastructure, combined with its highly refined advertising capabilities, reaching over 200 million users monthly, provides a natural advantage for blockchain projects to land and expand in the Asia-Pacific market.

It is worth noting the LINE Miniapp plan, which serves as a bridge connecting Web2 and Web3. This feature not only allows existing users to easily access decentralized applications, but also creates a highly compatible development environment through deep integration of its payment, advertising, and communication ecosystems.

Finschia, a blockchain under LINE, was launched in 2018 and has developed over about 5 years, now boasting more than 5.6 million Web3 wallet users and a community of over 170k members, holding significant positions in Japan, Taiwan, Thailand, and Abu Dhabi.

LINE's strategic direction indicates that in the future Web3 world, it will not only be a participant but also a driver and accelerator, helping the entire industry bridge the critical gap from technology to mainstream application.

Currently, Kaia has confirmed that it will launch the Line mini program SDK and will list the first batch of Line mini program applications in January 2025, while meeting regulatory requirements. On the Kakao side, among Kaia's 6 council members, 3 are from Kakao's blockchain Klaytn. In addition, Kakao and its affiliates hold about 9.8% of Kaia's total supply and actively participate in its governance. However, the current regulatory uncertainty in South Korea hinders Kakao from playing a more active role in blockchain initiatives, such as launching mini dApps like LINE. Once the regulatory uncertainty is resolved and LINE's mini dApp services become successful, Kakao is expected to fully embrace blockchain integration.

( 1.2 Token Economics

)# 1.2.1 Token $Kaia

The native token KAIA of Kaia plays a core role in the blockchain economy, used to pay transaction fees when creating or executing smart contracts or transferring KAIA. It is not only a means of transaction payment but also powers the normal operation of the entire system.

1. Incentive Mechanism: Platform customers incentivize consensus nodes ###Consensus Nodes, CNs### by paying KAIA, as these nodes are responsible for verifying transactions and executing smart contracts. In short, nodes provide computing power and resources, and users pay KAIA in return, creating a mutually beneficial relationship.

2. Promote Development Quality: The costs paid using KAIA are proportional to the complexity and resource consumption of the smart contract. If the developer's code is too inefficient or redundant, executing this code will be more expensive. This mechanism encourages developers to optimize code quality and avoid wasting computational resources.

3. Maintain network health: CN nodes support network operation by consuming computing power and bandwidth, and receiving KAIA rewards can incentivize more nodes to participate in the consensus process, thereby ensuring the decentralization and stability of the network.

Each new block automatically issues KAIA tokens, with an initial annual inflation rate of 5.2%. The block reward distribution is as follows:

1. CCO and Community: 50% ( 20% Block Creator Rewards, 80% Staking Rewards )
2. KEF( Kaia Ecosystem Fund ): 25%
3. KIF( Kaia Infrastructure Fund ): 25%

This distribution model not only incentivizes network participation but also supports the growth and development of the Kaia ecosystem.

The on-chain governance system implemented by Kaia aims to achieve fairness and inclusivity:

1. Voting rights are proportional to the number of KAIA tokens invested.
2. The voting rights cap can prevent the opinions of a minority from being suppressed.
3. Allow voting rights delegation.
4. All governance proposals are recorded on-chain to ensure transparency.

Since Klay was renamed to Kaia and went live on a certain trading platform, the coin price has performed excellently, continuously rising.

(# 1.2.2 Governance Council

As technological advancements drive rapid growth in the metaverse, decentralized autonomous organizations ) DAOs ### and developers are becoming important forces in the new economic paradigm. Kaia is keeping pace with this trend by launching the Kaia Governance Council (, GC ), which consists of 31 trusted early members, mostly from top institutions. These include: Kakao, a certain trading platform, Google Cloud, GS HomeShopping (, Korea's number one multimedia retailer ), LG Uplus (, a subsidiary of Korea's largest corporation LG Corporation ), Hanwha Systems (, Korea's second-largest non-bank financial group ), Everrich Group (, a real estate developer focused on Korea, Taiwan, and Southeast Asia ), HashKey (, a leading fintech group headquartered in Hong Kong, focusing on blockchain development ), NEOPLY (, a leading startup accelerator under NEOWIZ, a large Korean online gaming company specializing in blockchain investment ), etc.

Through this choice, the Kaia platform has successfully achieved stable operation of the mainnet, ensuring the rapid and efficient advancement of technical stability and operational implementation in the early stages of the platform's development, laying a solid foundation for the subsequent innovation of governance models.

Kaia has also expanded the membership of GC from traditional enterprises to DAOs and builders to meet the needs of the new era. Kaia's ultimate vision is to become a fully decentralized "DAO of DAOs," unifying the voices of all governance entities through on-chain mechanisms. This is not only a technological innovation but also represents a true transformation of governance structures – empowering all stakeholders with greater voice and setting a new benchmark for the decentralized development of the metaverse.

Kaia's governance framework is not only a core pillar of its platform development but also a key highlight for attracting global developers, communities, and organizations to participate. With a governance mechanism that combines foresight and flexibility, Kaia is laying a solid foundation for the sustainable growth of the blockchain ecosystem.

In addition, Kaia has been working closely with government agencies; for example, the Bank of Korea has chosen its parent company Ground X as the primary technology provider for the blockchain-based digital won simulation.

( 1.3 Technical Architecture Principles

Kaia is a highly optimized, BFT ) Byzantine Fault Tolerance-based public blockchain that aims to achieve consensus in decentralized networks even in the presence of malicious nodes or faults ###, designed to meet enterprise-level reliability and performance standards.

Kaia Blockchain offers:

1. 1 second block generation and confirmation time.
2. Can process 4000 transactions per second.
3. Low gas fees, about 1/10 of Ethereum.
4. EVM compatible, supports Solidity contracts.
5. The governance is conducted by the Kaia Governance Committee composed of globally renowned enterprises.