Kaia: Partnering with LINE and Kakao to create the largest Web3 ecosystem in Asia

1. Background Overview of Kaia

1.1 Project Introduction

1.1.1 Establishment and Development History

On January 16, 2024, Klaytn and Finschia announced the launch of a unified mainnet plan. On August 29, 2024, the merged Kaia mainnet officially goes live. 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 CKO at KrustUniverse, where he was responsible for leading the development and operation of Klaytn.

The joint support of Kakao and LINE provides strong momentum for Kaia. Kakao has a usage rate of up to 96% in South Korea, while LINE is very popular in Japan, Taiwan, and Thailand. Kaia has a potential user base of over 250 million, which is expected to greatly enhance the popularity and acceptance of blockchain technology in the East Asian market.

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

Klaytn is built for DApp developers and enterprises. The cumulative transaction volume is $376 billion, with over 29 million Web3 wallet users and more than 240k community members, and the ATH Onchain TVL exceeds $1 billion.

1.1.4 Line and Finschia

LINE covers 70% of the Japanese population and dominates markets in Thailand, Taiwan, and other regions. Japan has 92 million monthly active users, Thailand has 51 million, Taiwan has 21 million, and Indonesia has 13 million.

The LINE payment ecosystem demonstrates its potential in the blockchain economy. LINE Pay has 40 million monthly active payment users and an annual transaction volume of over 12 billion USD.

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

1.2 Token Economics

1.2.1 Token $Kaia

Kaia's native token KAIA is used to pay transaction fees and plays a core role in the blockchain economy. 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%

Kaia implements an on-chain governance system where voting power is proportional to the amount of KAIA tokens contributed, but there is a cap to prevent the opinions of a minority from being suppressed.

1.2.2 Governance Council

The Kaia Governance Committee consists of 31 early members, including top institutions such as Kakao, Binance, and Google Cloud. Kaia's ultimate vision is to become a fully decentralized "DAO of DAOs."

1.3 Technical Architecture Principles

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

• 1 second block generation and confirmation time
• Process 4000 transactions per second
• Low gas prices, about 1/10 of Ethereum's.
• EVM compatible, supports Solidity contracts

The network structure of Kaia is divided into three logical subnetworks:

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

1.3.1 Consensus Algorithm

Kaia adopts an optimized version of Istanbul BFT. There are three types of nodes in the network: 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. It employs a random yet deterministic election process, requiring two-thirds of the committee members' signatures to agree before a new block can be added.

1.3.3 Kaia Virtual Machine (KVM)

KVM is based on the Ethereum Virtual Machine architecture, supports Ethereum opcodes, and adds specialized precompiled contracts. It is compatible with Ethereum development tools, making it easier for developers to migrate existing projects.

1.3.4 Security Measures

Kaia uses VRF to randomly select block proposers, employs a key separation mechanism to enhance security, and maintains a transparent verification process.

1.3.5 Interoperability

Kaia supports EVM compatibility, allowing interaction with other EVM-SDK based blockchains for cross-platform trading and smart contract execution.

1.4 Competitors

Compared to TON based on Telegram, Kaia shows a current valuation that is undervalued in terms of the MC/TVL metrics, suggesting that the market potential has not yet been fully tapped. With the vast user ecosystems of LINE and KakaoTalk, Kaia is expected to unleash social and payment dividends.

Preliminary Value Assessment 1.5

Kaia's localization strategy and strong user base have secured an irreplaceable position in the Asian market. The LINE mini app, set to launch in Q1 2025, will be an important opportunity to test its ecological value.

2. Kaia's Ecosystem

2.1 DEFI track

2.1.1 Neopin

The licensed DeFi protocol under South Korean gaming giant Neowiz has reached a TVL of $240 million, supports 59 tokens, and has 22 nodes.

2.1.2 Lair Finance

Kaia Liquidity Staking Protocol provides users with DeFi yield opportunities.

2.1.3 CapybaraExchange

The largest DEX on the Kaia chain, with a TVL of over $40 million.

2.1.4 Avalon Labs

A leading lending ecosystem centered around Bitcoin, focused on DeFi, CeDeFi, and RWA lending.

2.1.5 DragonSwap

The DeFi hub on Sei, supporting AMM, prediction markets, and LST.

2.2 Payment Track

2.2.1 Alchemy Pay

A payment gateway that connects cryptocurrencies and global fiat currencies for businesses, developers, and users.

2.3 AI track

2.3.1 FlareAI

The first AI-driven DApp on the Kaia blockchain.

2.3.2 FDN

AI facial recognition network that utilizes Web3 incentive characteristics to obtain facial data.

2.4 MINI DAPPS on LINE

Kaia has announced the first batch of Mini Dapp launch list, including 20 projects such as Bombie, Bullet Storm, and Captain Tsubasa.

2.5 Other ecological activities

2.5.1 Kaia Wave

Web3 Maker Program, offering up to $10 million in KAIA token support.

2.5.2 Line Next

A dedicated Web3 company under LINE, focusing on NFT business.

2.5.3 Kaia Grants

Provide support and professional assistance for DApps.

3. Highlights Summary

1. Unique positioning: Giants join forces to build the cornerstone of the East Asian blockchain ecosystem
2. Asset scale and ecological breadth: The largest Web3 network in Asia
3. Large-scale introduction of existing Web2 users: The gateway connecting Web and Web3
4. Global Vision and Ecological Cooperation: From East Asia to the World
5. The undervaluation of MC/TVL
6. Layout for the Future: Reshaping the Digital Infrastructure of Finance and Culture

Kaia Chain demonstrates outstanding capability in promoting 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 the mission of reshaping the global blockchain landscape will become an important barometer for the development of the blockchain industry.