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

1. Background Overview of Kaia

1.1 Project Introduction

1.1.1 Establishment and Development History

On January 16, 2024, two leading blockchain platforms, Klaytn and Finschia, announced the launch of a unified mainnet. These two mainnets originate from the internet giants Kakao and LINE in South Korea and Japan, respectively. On August 29, 2024, the merged Kaia mainnet will officially go 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 PhD in high-performance computing and previously served as the CKO at KrustUniverse, responsible for leading the development and operation of Klaytn. Additionally, he was the Chief Technology Officer at GroundX and worked as an assistant computer scientist at Argonne National Laboratory.

The joint support of the two giants Kakao and LINE has injected strong momentum into the development of Kaia. Kakao has a usage rate as high as 96% in South Korea, with significant influence in Vietnam as well. LINE is favored by users in regions such as Japan, Taiwan, and Thailand. Together, the potential user base of Kaia exceeds 250 million, significantly enhancing its global coverage. Other investors in Kaia include Hashed, IDG Capital, and others.

1.1.2 Important Milestones

January 16, 2024: Klaytn and Finschia announce merger August 29, 2024: Kaia mainnet officially launched September 2024: Kaia Wave officially launched Q1 2025: Plan to launch LINE mini app

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 over 17k employees, and its operating profit in Q3 2024 was 130.5 billion won, a year-on-year increase of 5%. The platform division, including Kakao Talk, saw a revenue increase of 7%, reaching 943.5 billion won.

Klaytn was built from the beginning for DApp developers and enterprises. This ecosystem allows developers to unleash their creativity and enhance user experience. Klaytn's cumulative transaction volume is $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.

1.1.4 Line and Finschia

LINE covers 70% of the Japanese population and also dominates markets such as Thailand and Taiwan. Among them, the monthly active users in Japan reach 92 million, the number of users in Thailand exceeds 51 million, the number of users in Taiwan reaches 21 million, and the Indonesian market also has 13 million users.

LINE's unique ecological integration capabilities are particularly prominent. Users can consume its rich content products on LINE, including over 300,000 comic books and 9 games that integrate social interaction. The average usage time of over 4 hours per week highlights its irreplaceability in users' daily lives.

LINE's payment ecosystem showcases its potential in the blockchain economy. With 40 million monthly active payment users and over $12 billion in transaction volume for the year, LINE Pay has provided its users with a seamless digital payment experience.

Finschia was launched as early as 2018 and after about 5 years of development, it has over 5.6 million Web 3 wallet users, more than 170k community members, and holds an important position in Japan, Taiwan, Thailand, and Abu Dhabi.

Kaia has confirmed the launch of the SDK for Line mini programs and will release the first batch of Line mini program applications in January 2025, while also meeting regulatory requirements. Regarding Kakao, among the 6 council members of Kaia, 3 are from Kakao's blockchain Klaytn. Additionally, Kakao and its affiliates hold approximately 9.8% of Kaia's total supply and are actively involved in its governance.

1.2 Token Economics

1.2.1 Token $Kaia

Kaia's native token KAIA plays a central role in the blockchain economy, used to pay transaction fees when creating or executing smart contracts or transferring KAIA. It serves not only as a means of payment for transactions but also powers the normal operation of the entire system.

1. Incentive Mechanism: The platform's customers incentivize consensus nodes by paying KAIA, and these nodes are responsible for validating transactions and executing smart contracts.
2. Promote Development Quality: The fees paid using KAIA are proportional to the complexity of the smart contract and resource consumption.
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.

Each new block will automatically issue 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%

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 cap on voting rights 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.

1.2.2 Governance Council

Kaia has launched the Kaia Governance Committee, composed of 31 trusted early members, most of whom are top institutions. These include: Kakao, Binance, Google Cloud, GS HomeShopping, LG Uplus, Hanwha Systems, Everrich Group, HashKey, NEOPLY, and others.

Through this choice, the Kaia platform successfully achieved stable operation of the mainnet, ensuring rapid and efficient advancement of technological 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 also extends GC membership from traditional enterprises to DAOs and builders to meet the demands 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.

In addition, Kaia has also closely collaborated with government departments; for example, the Bank of Korea has chosen its parent company Ground X as the main technology provider for the blockchain-based digital Korean won simulation.

1.3 Technical Architecture Principles

Kaia is a highly optimized, BFT-based public blockchain 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 price, about 1/10 of Ethereum.
4. EVM compatible, supports Solidity contracts.
5. The governance is carried out by the Kaia Governance Committee, composed of globally renowned enterprises.

The network structure of Kaia is divided into three logical sub-networks:

1. Core Unit Network: Composed of core units responsible for transaction validation, execution, and block creation.
2. Endpoint Node Network: Composed of endpoint nodes, responsible for processing RPC API requests and servicing chain data.
3. Service Chain Network: An auxiliary blockchain that operates independently from DApp and connects to the main chain through EN.

1.3.1 Consensus Algorithm

Kaia uses an optimized version of Istanbul BFT. In Kaia, there are three types of nodes: CN( consensus nodes ), PN( proxy nodes ), and EN( endpoint nodes ).

1. Consensus Node: Responsible for generating blocks, managed by core node operators.
2. Proxy Nodes: Transfer data between consensus nodes and users. Provide network interfaces, transmit transaction requests, and propagate blocks.
3. Core unit: consists of one consensus node and two proxy nodes.
4. Terminal Node: Acts as a network endpoint, handling API requests and data processing. Connects users and the network, providing access services.
5. Guide Node: A special node operated by Kaia, used to assist new nodes in joining the network.

Since validation and consensus are conducted for each block, forks will not occur, and once consensus is reached, the finality of the block can be guaranteed immediately.

The issue of increased communication volume in the BFT algorithm is also resolved by utilizing a randomly selected committee. The CN collectively forms a committee, and during the generation of each block, a portion of it is selected as committee members using VRF. The main process is:

1. Random Selection Committee: Use VRF to fairly randomly select a group of people who are responsible for generating and verifying blocks.
2. Generate Block: The selected proposer will generate a new block.
3. Verification and Signing: Validators in the committee will review whether the block submitted by the proposer is correct. If more than two-thirds of the validators approve and sign, the block will be added to the blockchain.

1.3.2 Block Generation and Propagation

Kaia's block generation and propagation design is simple and efficient, ensuring the stability and scalability of the system. The specific features are as follows:

1. Quickly generate blocks: The goal of each round of operations is to generate a block within 1 second.
2. Random yet deterministic election process: The election of proposers and committee members is random, but the process is determined by an algorithm, and all nodes can verify this randomness.
3. Two-thirds signature rule: A new block can only be added to the blockchain after more than two-thirds of the committee members have signed in agreement.
4. Multi-channel propagation: Blocks and transactions are propagated through independent channels, significantly reducing latency and conflicts.

1.3.3 Kaia Virtual Machine

Kaia's virtual machine is the core component for running smart contracts, designed with compatibility and scalability in mind, with main features including:

1. Based on the Ethereum Virtual Machine: Kaia directly inherits the architecture of the Ethereum Virtual Machine, therefore all Ethereum smart contracts can run seamlessly on Kaia.

2. Extended Functionality: Based on supporting Ethereum opcodes, Kaia has added some specialized precompiled contracts.

3. Compatible Ethereum Development Tools: Developers can use popular Ethereum development tools such as Remix, Hardhat, and Foundry.

4. Easy Migration: If developers have already developed smart contracts on Ethereum, they can deploy the contracts to the Kaia platform with minimal modifications.

1.3.4 Security Measures

Kaia