Kaia: Joining Hands with Line and Kakao to Open a New Era of Web3 in Asia

1. Overview of Kaia's Background

1.1 Project Overview

1.1.1 Establishment and Development History

On January 16, 2024, 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 officially went live. Kakao and LINE plan to create a giant blockchain in Asia and gradually lead the global Web3 market.

The chairman of the Kaia Foundation is Sam Seo, who holds a PhD in high-performance computing. Sam previously served as CKO at KrustUniverse, responsible for leading the development and operations of Klaytn. He also served as Chief Technology Officer at GroundX and was an assistant computer scientist at Argonne National Laboratory.

The joint support of Kakao and LINE has injected strong momentum into Kaia. Kakao has a usage rate of 96% in South Korea, while LINE is very popular among users in Japan, Taiwan, and Thailand. Kaia has a potential user base of over 250 million, which is expected to significantly enhance the popularity of blockchain technology in the East Asian market and create a large-scale, vibrant Web3 ecosystem in Asia.

1.1.2 Important Time Nodes

• 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 operating profit for Q3 2024 was 130.5 billion won, a year-on-year increase of 5%.

Klaytn has been designed for DApp developers and enterprises from the very beginning. Klaytn's cumulative transaction volume is $376 billion, with over 29 million Web3 wallet users and more than 240k community members. The ATH Onchain TVL has exceeded $1 billion.

1.1.4 Line and Finschia

LINE covers 70% of the Japanese population and also holds a dominant position in markets such as Thailand and Taiwan. Japan has 92 million monthly active users, Thailand has 51 million, Taiwan has 21 million, and Indonesia has 13 million.

LINE's payment ecosystem demonstrates its potential in the blockchain economy. LINE Pay has 40 million monthly active payment users and over $12 billion in transaction volume for the year.

Finschia was launched as early as 2018, with over 5.6 million Web3 wallet users and more than 170k community members, holding an important position in Japan, Taiwan, Thailand, and Abu Dhabi.

1.2 Token Economics

1.2.1 Token $Kaia

The native token KAIA of Kaia plays a central role in the blockchain economy, used for paying transaction fees. Each new block automatically issues KAIA tokens, with an initial annual inflation rate of 5.2%. The block reward distribution is as follows:

• CCO and Community: 50%
• KEF (Kaia Ecosystem Fund): 25%
• KIF (Kaia Infrastructure Fund): 25%

1.2.2 Governance Council

The Kaia Governance Council (GC) is composed of 31 trusted early members, including top institutions such as Kakao, Binance, Google Cloud, and others.

1.3 Technical Architecture Principles

Kaia is a highly optimized, BFT-based public blockchain that offers:

• 1 second block generation and confirmation time
• Can process 4000 transactions per second
• Low gas price, approximately 1/10 of Ethereum
• EVM compatible, supports Solidity contracts

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

1. Core Cell Network (CCN)
2. Endpoint Node Network (ENN)
3. Service Chain Network (SCN)

1.3.1 Consensus Algorithm

Kaia uses an optimized version of Istanbul BFT. There are three types of nodes: CN (Consensus Node), PN (Proxy Node), and EN (Endpoint Node).

1.3.2 Block Generation and Propagation

Kaia's block generation and propagation design is simple and efficient, with the goal of generating a block within 1 second for each round of operation.

1.3.3 Kaia Virtual Machine (KVM)

KVM is the core component for running smart contracts, based on the Ethereum Virtual Machine (EVM), and is compatible with Ethereum development tools.

1.3.4 Security Measures

Kaia has implemented a series of security designs, including random selection of proposers, key separation, and more.

1.3.5 Interoperability

Kaia supports interaction with other EVM-SDK based blockchains, enabling cross-platform transactions and smart contract execution.

1.4 Competitors

Compared to TON, Kaia's MC/TVL ratio indicates that its current valuation is low, suggesting that the market potential has not yet been fully tapped.

Preliminary Valuation 1.5

Kaia's localization strategy and strong user base have secured an irreplaceable position in the Asian market. The social and payment dividends released by its reliance on the vast user ecosystems of LINE and KakaoTalk have not yet fully translated into capital market value.

2. Kaia's Ecosystem

2.1 DEFI track

• Neopin: A licensed DeFi protocol under the Korean gaming giant Neowiz.
• Lair Finance: Kaia Liquidity Staking Protocol
• CapybaraExchange: The largest DEX on the Kaia chain
• Avalon Labs: A leading lending ecosystem centered around Bitcoin.
• DragonSwap: The DeFi hub on Sei

2.2 Payment Track

• Alchemy Pay: A payment gateway connecting cryptocurrencies and global fiat currencies for businesses, developers, and users.

2.3 AI track

• FlareAI: The first AI-driven DApp on the Kaia blockchain
• FDN: AI Facial Recognition Network

2.4 MINI DAPPS on LINE

Including 20 Mini DApps such as Bombie, Bullet Storm, Captain Tsubasa, etc.

2.5 Other ecological activities

• Kaia Wave: Web3 Maker Program
• Line Next: A dedicated Web3 enterprise under LINE.
• Kaia Grants: A project that provides support and assistance for DApps
• Kaia Ecosystem Fund: Focused on ecological construction
• Kaia Infrastructure Fund: Supports mainnet and infrastructure research and development
• Ignite on Kaia: Helping DApp developers achieve seamless onboarding

3. Highlights Summary

1. Unique Positioning: Giants Join Forces to Build the Foundation of the East Asian Blockchain Ecosystem
2. Asset scale and ecological breadth: The largest Web3 network in Asia
3. A large influx of existing Web2 users: a gateway connecting Web and Web3
4. Global Vision and Ecological Cooperation: From East Asia to the World
5. Undervaluation of MC/TVL
6. Layout for the Future: Reshaping the Digital Infrastructure of Finance and Culture

Kaia Chain has demonstrated its exceptional ability to promote the large-scale application of blockchain through deep cultivation in East Asia, integration of major resources, and bold globalization strategies. In the future, whether Kaia can accomplish its mission of reshaping the global blockchain landscape will become an important barometer for the development of the blockchain industry.