Kaia: The Web3 infrastructure built in partnership with Asia's social media giants

1. Overview of Kaia's Background

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. The merger of these two mainnets, originating from South Korea's Kakao and Japan's LINE, represents an unusual project in the Web3 ecosystem. The merged Kaia mainnet officially goes live on August 29, 2024. 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 previously served as CKO at KrustUniverse, responsible for leading the development and operation of Klaytn. He also worked as the Chief Technology Officer at GroundX and was an assistant computer scientist at Argonne National Laboratory.

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. With both combined, Kaia's potential user base exceeds 250 million, significantly enhancing its global coverage. This lays the foundation for Kaia to create a large-scale and vibrant Web3 ecosystem in Asia.

1.1.2 Important Time Nodes

• January 16, 2024: Klaytn and Finschia announce the launch of the unified mainnet plan
• 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, of which 90% are from South Korea. The company has over 17k employees, and its operating profit for Q3 2024 was 130.5 billion KRW, a year-on-year increase of 5%.

Klaytn has been built for DApp developers and enterprises from the very beginning. Its total transaction volume has reached $376 billion, with over 29 million Web3 wallet users and more than 240k community members. The all-time high (ATH) on-chain Total Value Locked (TVL) exceeds $1 billion.

1.1.4 Line and Finschia

LINE covers 70% of the Japanese population and also dominates 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 ecological integration capability is outstanding, allowing users to consume its rich content products, including over 300,000 comic books and 9 games. With an average usage time of over 4 hours per week, it highlights its irreplaceability in users' daily lives.

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

Finschia was launched in 2018, with over 5.6 million Web3 wallet users and more than 170,000 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 plays a core role in the blockchain economy, used for paying transaction fees. It is not only a means of payment for transactions but also provides the necessary energy for the normal operation of the entire system.

1. Incentive Mechanism: Users incentivize consensus nodes by paying KAIA.
2. Promote development quality: The fees paid using KAIA are proportional to the complexity of the smart contract, encouraging developers to optimize code quality.
3. Maintain network health: CN nodes receiving KAIA rewards can encourage 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 distribution of block rewards 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 amount 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

The Kaia Governance Council, GC(, is composed of 31 trusted early members, most of whom are top-tier institutions. These include: Kakao, Binance, Google Cloud, GS HomeShopping, LG Uplus, Hanwha Systems, Everrich Group, HashKey, NEOPLY, and others.

Kaia has also expanded GC membership from traditional enterprises to DAOs and builders. Kaia's ultimate vision is to become a fully decentralized "DAO of DAOs", unifying the voices of all governance entities through on-chain mechanisms.

) 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 provides:

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 conducted by the Kaia Governance Committee composed of globally renowned enterprises.

Kaia's network structure is divided into three logical sub-networks:

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

)# 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 ), CN(: Responsible for generating blocks, managed by core node operator ) CCO (.
2. Proxy Nodes ), PN(: Transmit data between consensus nodes and users.
3. Core unit )CC(: Consists of one consensus node )CN( and two proxy nodes )PN(.
4. Terminal Node )EN(: Acts as a network endpoint, handling API requests and data processing.
5. Guide Node ) Bootnode (: A special node operated by Kaia to assist new nodes in joining the network.

![With Line and Kakao, two major Asian social giants, 250 million users are poised for potential growth. Can Kaia replicate the myth of TON?])https://img-cdn.gateio.im/webp-social/moments-b1277c4c9804c4b711bfc616242841a3.webp(

)# 1.3.2 Block Generation and Propagation

Kaia's block generation and propagation design is simple and efficient:

1. Quickly generate a block: 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 verifiable.
3. Two-thirds signature rule: A new block must be approved by signatures from more than two-thirds of the committee members.
4. Multi-channel propagation: Blocks and transactions propagate independently, reducing latency and conflicts.

1.3.3 Kaia Virtual Machine ### KVM (

The virtual machine )KVM( of Kaia is a core component for running smart contracts, with main features including:

1. Based on the Ethereum Virtual Machine )EVM(
2. Added dedicated pre-compiled contracts
3. Compatible with Ethereum development tools
4. Easy Migration of Ethereum Smart Contracts

)# 1.3.4 Security Measures

Kaia has implemented a series of security designs:

1. Use VRF to randomly select block proposers
2. Validators use two different keys: the validation key and the reward key.
3. Committee members verify new blocks, and all signature records are public.

1.3.5 Interoperability

Kaia has the ability to interact seamlessly with other blockchains:

1. EVM Compatibility
2. Cross-chain capabilities
3. Support for multi-chain ecosystem

1.4 Competitors

This mainly compares Kaia with the Telegram-based TON.

TON originated from a project proposed by Telegram's founder in 2017, aimed at deeply integrating blockchain technology with Telegram's social ecosystem. Although Telegram abandoned the TON project in 2020, the open-source community continued the project's vision. In 2021, the TON mainnet was officially launched.

TON adopts sharding technology and a PoS consensus mechanism, supporting large-scale parallel transaction processing. Its innovative features include TON DNS, TON Storage, and instant payment channels.

As of 2024, TON has attracted over 800 applications online, including stablecoin solutions, NFT platforms, and DeFi applications, among others. Some of the more representative ones include:

• Tap to Earn mini-game
• DeFi Applications
• NFT and SocialFi applications

![With Line and Kakao, two major Asian social giants, 250 million user potential is ready to take off. Can Kaia replicate the myth of TON?]###https://img-cdn.gateio.im/webp-social/moments-275e81b1388261a820b2b6938cd7235e.webp(

) 1.5 Preliminary Value Assessment

From the perspective of the MC/TVL indicator, compared to TON, KAIA's current valuation is significantly low, suggesting that its market positioning and localization strategy have not been fully quantified, and its potential in the capital market has not been completely tapped. In particular, the social and payment dividends released by its large user ecosystems relying on LINE and KakaoTalk have not yet been fully converted into capital market value.

2. Kaia's Ecosystem

2.1 DEFI track

2.1.1 Neopin

Neopin is a "permissioned DeFi protocol" under the South Korean gaming giant Neowiz, combining the advantages of CeFi and DeFi. The current TVL has reached $240 million, supporting 59 tokens and having 22 nodes.

2.1.2 Lair Finance

Lair Finance is the Kaia liquidity staking protocol, providing users with DeFi yield opportunities.

2.1.3 CapybaraExchange

The first and largest DEX on the Kaia chain. Its TVL has significantly increased in the past two months, surpassing 40 million USD.

2.1.4 Avalon Labs

Avalon Labs is a leading lending ecosystem centered around Bitcoin, uniquely positioned at the intersection of DeFi, CeDeFi, and RWA lending.

2.1.5 DragonSwap

DragonSwap is the DeFi central hub on Sei, supporting AMM, prediction markets, and LST. Currently, the TVL has exceeded 55 million USD, with nearly 120,000 users.

![With Line and Kakao, two major Asian social giants, 250 million users' potential is ready to take off. Can Kaia replicate the myth of TON?]###https://img-cdn.gateio.im/webp-social/moments-42727c9a488fc9d930cc7fe68083cbdc.webp(

) 2.2 Payment track

2.2.1 Alchemy Pay

Alchemy Pay is a payment gateway that seamlessly connects businesses, developers, and users with cryptocurrencies and global fiat currencies. It supports payments in 173 countries, with a focus on emerging markets.

2.3 AI track

2.3.1 FlareAI

FlareAI is the first AI-driven DApp launched on the Kaia blockchain, aimed at addressing key challenges in AI development.

2.3.2 FDN

FDN is an AI facial recognition network that leverages the incentive characteristics of Web3 to acquire facial data, creating value in scenarios such as AIGC-generated 3D character images and advertising marketing.

2.4 MINI DAPPS on LINE

LINE announced the first batch of Mini Dapp launch list, including:

1. Bombie
2. Bullet Storm 3