Kaia: The Rise of Asia's Largest Blockchain Network

In August 2024, the two major blockchain platforms Klaytn and Finschia announced their merger into the Kaia mainnet. This move integrates the blockchain businesses of the two internet giants, South Korea's Kakao and Japan's LINE, creating a blockchain giant in Asia with 250 million potential users.

1. Overview of Kaia's Background

1.1 Project Introduction

Kaia is formed by the merger of Klaytn and Finschia, inheriting the technological accumulation and user base of both companies. Kakao has a 96% usage rate in South Korea, while LINE is popular in regions such as Japan, Taiwan, and Thailand. This provides Kaia with a large user base, which is expected to promote the adoption of Blockchain technology in the East Asian market.

Sam Seo, the chairman of the Kaia Foundation, has a professional background in Blockchain and high-performance computing, having held key positions at Klaytn and Kakao's blockchain subsidiary.

1.2 Token Economics

The native token KAIA of Kaia is used to pay transaction fees, incentivize nodes, and promote the healthy development of the network. The initial annual inflation rate is 5.2%, and the token distribution is as follows:

• 50% for consensus nodes and community rewards
• 25% for ecosystem fund
• 25% for infrastructure fund

Kaia implements on-chain governance, where voting rights are proportional to the number of staked tokens, but there is a cap to prevent a minority from gaining control.

1.3 Technical Architecture

Kaia adopts an optimized version of the Istanbul BFT consensus algorithm, the network structure includes:

• Core Unit Network: Responsible for transaction validation and block generation
• Endpoint Node Network: Handling API requests and service chain data
• Service Chain Network: An auxiliary blockchain for the independent operation of DApps

Kaia can process 4000 transactions per second, with a block generation time of 1 second, and the gas fee is approximately 1/10 of Ethereum.

1.4 Competitors

Compared to Telegram-based TON, Kaia has unique advantages in the Asian market:

• User Base: Kaia has over 250 million potential users, mainly concentrated in East Asia.
• Localization Strategy: Deep integration of LINE and Kakao's social payment ecosystem
• Regulatory Compliance: Actively cooperate with regulatory agencies in Korea, Japan, and other regions.

2. Kaia's Ecosystem

2.1 DeFi track

Kaia has launched the D2I ( DeFi to Infrastructure ) plan, aimed at revitalizing the DeFi ecosystem. Major projects include:

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

2.2 Payment Track

Alchemy Pay collaborates with Kaia to provide users with a zero-fee KAIA bridging service, supporting fiat payments in 173 countries.

2.3 AI track

• FlareAI: The first AI-driven DApp on Kaia
• FDN: AI facial recognition network utilizing Web3 features

2.4 Mini DApps on LINE

Kaia has partnered with LINE to launch Mini DApps, with the first batch of 20 projects covering various fields such as gaming, social, and health.

2.5 Other ecological activities

• Kaia Wave: Provides funding and resource support for Web3 creators
• LINE NEXT: A Web3 company focused on NFT business
• Kaia Grants: Provides funding support for DApps

3. Highlights Summary

1. Unique Positioning: Integrating Kakao and LINE resources to create the cornerstone of the East Asian Blockchain ecosystem.
2. Asset Scale: After unification, the asset scale exceeds $75 billion, becoming the largest Web3 network in Asia.
3. User Acquisition: Lower the entry barrier to Web3 through products like LINE MiniApp.
4. Global Vision: Expanding from East Asia to international markets such as the Middle East
5. Undervalued: Compared to competitors like TON, Kaia currently has a lower MC/TVL ratio, indicating growth potential.
6. Future Layout: Committed to Reshaping the Digital Infrastructure of Finance and Culture

Kaia is demonstrating the potential to drive large-scale applications of Blockchain by integrating resources from industry giants, deeply cultivating local markets, and pursuing a global strategy. Its future development will become an important barometer for the Blockchain industry.