Kaia: A Web3 ecosystem created by the two major social giants in Asia

On August 29, 2024, the Kaia mainnet, supported jointly by South Korea's Kakao and Japan's LINE, was officially launched. This marks the birth of a giant Asian blockchain with 250 million potential users. Kaia aims to create the largest Web3 ecosystem in Asia and gradually lead the global Web3 market.

1. Background Overview of Kaia

1.1 Project Introduction

Kaia is the merger of two major blockchain platforms, Klaytn and Finschia. Klaytn is backed by the South Korean social giant Kakao, while Finschia is supported by the Japanese social giant LINE. Such large project mergers are very rare in the Web3 ecosystem.

Sam Seo, the chairman of the Kaia Foundation, holds a PhD in high-performance computing and previously served as CKO at KrustUniverse, leading the development and operations of Klaytn. He also served as CTO at GroundX, a blockchain subsidiary of Kakao.

The joint support of Kakao and LINE has injected strong momentum into Kaia. Kakao has a usage rate as high as 96% in South Korea, while LINE is very popular in Japan, Taiwan, and Thailand. Combined, Kaia's potential user base exceeds 250 million. This lays the foundation for the large-scale application of blockchain technology in the East Asian market.

1.2 Token Economics

Kaia's native token KAIA plays a central role in the ecosystem, used for paying transaction fees, incentivizing consensus nodes, etc. The initial annual inflation rate is 5.2%. The block reward distribution is as follows:

• 50% to CCO and the community
• 25% to Kaia Ecosystem Fund (KEF)
• 25% to Kaia Infrastructure Fund (KIF)

Kaia implements on-chain governance, where voting rights are proportional to the amount of staked KAIA, but there is a cap in place to prevent the opinions of a minority from being suppressed.

1.3 Technical Architecture

Kaia is a highly optimized, BFT-based public blockchain with key features including:

• 1 second block generation and confirmation time
• Processing 4000 transactions per second
• Gas fee is about 1/10 of Ethereum.
• EVM compatible, supports Solidity contracts

Kaia adopts an optimized version of the Istanbul BFT consensus algorithm, which addresses the issue of increased communication volume in BFT algorithms by randomly selecting committees. The network structure is divided into three logical subnetworks: core unit network, endpoint node network, and service chain network.

2. The Ecosystem of Kaia

2.1 DeFi track

Kaia has launched the D2I( DeFi to Infrastructure) plan to quickly revitalize the DeFi ecosystem. Major projects include:

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

2.2 Payment Track

Alchemy Pay collaborates with Kaia to provide users with a zero-fee $KAIA bridge service, supporting payment methods in 173 countries.

2.3 AI track

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

2.4 Mini DApps on LINE

Kaia will launch over 20 Mini DApps on LINE, covering various fields such as gaming, social networking, and health. These applications will bring a large number of Web2 users to Kaia.

2.5 Other ecological activities

• Kaia Wave: Provides up to $10 million support for Web3 creators.
• LINE NEXT: A Web3 company focused on NFT business
• Kaia Grants: Providing various support for DApps

3. Highlights Summary

1. Unique Positioning: Giants Join Forces to Build the Foundation of the East Asia Blockchain Ecosystem
2. Asset scale and ecological breadth: Asia's largest Web3 network
3. A large influx of Web2 users: The gateway connecting Web2 and Web3
4. Global Vision and Ecological Collaboration: From East Asia to the World
5. Low valuation of MC/TVL: indicates huge growth potential
6. Layout for the Future: Reshaping the Digital Infrastructure of Finance and Culture

Kaia has demonstrated exceptional ability to promote the large-scale application of blockchain by integrating resources from industry giants, deeply cultivating the East Asian market, and implementing bold globalization strategies. Its future development will become an important barometer for the blockchain industry.