Kaia: A Web3 ecosystem created by Asian 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. On August 29, 2024, the merged Kaia mainnet will be officially launched. Kakao and LINE plan to create a giant blockchain in Asia, gradually leading 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, responsible for the development and operation of Klaytn.

The joint support of Kakao and LINE has injected strong momentum into Kaia. Kakao has a usage rate of up to 96% in South Korea, and LINE is popular in Japan, Taiwan, and Thailand. Together, they provide Kaia with a potential user base of over 250 million. Kaia is expected to greatly enhance the popularity of blockchain technology in the East Asian market, laying the foundation for large-scale applications. Other investors include Hashed, IDG Capital, and others.

1.1.2 Important Milestones

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 Korean won, a year-on-year increase of 5%.

Klaytn has a total transaction volume of $376 billion, over 29 million Web3 wallet users, more than 240k community members, an ATH Onchain TVL exceeding $1 billion, and a strong influence in Singapore and Vietnam.

1.1.4 Line and Finschia

LINE covers 70% of Japan's population and dominates markets in Thailand, Taiwan, and other regions. Monthly active users in Japan are 92 million, Thailand 51 million, Taiwan 21 million, and Indonesia 13 million.

The LINE ecosystem has outstanding integration capabilities, allowing users to consume a wide range of content products. An average usage time of over 4 hours per week highlights its irreplaceability.

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

Finschia has 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

The native token KAIA of Kaia is used to pay transaction fees, incentivize consensus nodes, promote development quality, and maintain network health.

Initial annual inflation rate of 5.2%. Block reward distribution:

• CCO and Community: 50%
• KEF:25%
• KIF:25%

On-chain governance system achieves fairness and inclusiveness:

• Voting rights are proportional to the amount of KAIA.
• Set voting power limit
• Allow voting rights delegation
• Governance proposal recorded on-chain

1.2.2 Governance Council

The Kaia Governance Committee consists of 31 trusted early members, including top institutions such as Kakao, Binance, and Google Cloud.

Kaia plans to extend GC membership to DAOs and builders, with the ultimate vision of becoming 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
• 4000 transactions per second processing capability
• Low gas prices, about 1/10 of Ethereum
• EVM compatible, supporting Solidity contracts

The network structure is divided into:

• Core Unit Network ( CCN )
• Endpoint Node Network ( ENN )
• Service Chain Network ( SCN )

1.3.1 Consensus Algorithm

Kaia adopts an optimized version of Istanbul BFT, resolving the PBFT communication bottleneck issue through random selection of the committee.

Node types include:

• Consensus Node (CN)
• Proxy Node (PN)
• Core Unit (CC)
• Terminal Node (EN)
• Guide Node

1.3.2 Block Generation and Propagation

• Aim to generate a block within 1 second
• Random but determined election process
• Two-thirds signature rule
• Multi-channel propagation

1.3.3 Kaia Virtual Machine ( KVM )

• Based on the Ethereum Virtual Machine
• Add dedicated pre-compiled contracts
• Compatible with Ethereum development tools
• Convenient for Ethereum project migration

1.3.4 Security Measures

• Randomly select proposer
• Key Separation
• Transparent verification process

1.3.5 Interoperability

• EVM compatibility
• Cross-chain capability
• Supports multi-chain ecosystem

1.4 Competitors

Compared to TON:

• The user base of Kaia is more concentrated in Asia.
• Kaia has significant advantages in localization and payment integration.
• TON has a higher degree of globalization and covers a wider range.
• The TON ecosystem is more mature.

Preliminary Valuation of 1.5

• Kaia's MC/TVL ratio is significantly lower than TON, suggesting potential undervaluation.
• The advantages of Kaia relying on the user ecosystems of LINE and KakaoTalk have not yet been fully realized.
• The high valuation of TON may indicate a narrowing growth space.
• Kaia has strategic significance in the implementation of Web3 applications.
• The LINE mini app launching in Q1 2025 will be an important milestone.

2. The Ecosystem of Kaia

2.1 DEFI track

2.1.1 Neopin

The licensed DeFi protocol under the South Korean game company Neowiz has a TVL of 240 million USD.

2.1.2 Lair Finance

Kaia liquidity staking protocol, providing DeFi yield opportunities.

2.1.3 CapybaraExchange

The first and largest DEX on the Kaia chain, with a TVL exceeding 40 million USD.

2.1.4 Avalon Labs

A lending ecosystem centered around Bitcoin, connecting DeFi, CeDeFi, and RWA.

2.1.5 DragonSwap

The DeFi central hub on Sei, with a TVL exceeding 55 million dollars.

2.2 Payment Track

2.2.1 Alchemy Pay

A payment gateway connecting 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 chain.

2.3.2 FDN

AI facial recognition network, utilizing Web3 incentive features.

2.4 MINI DAPPS on LINE

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

1. Bombie
2. Bullet Storm
3. Captain Tsubasa (Minttown)
4. Contentverse (Wizzwood)
5. Elderglade
6. Frog Defense
7. Futr
8. Gee
9. Goblin Master
10. Goblin Tycoon
11. Heroic Arena
12. KeitoKun
13. Midnight Survivors
14. Shin Chan's Match Daily
15. SuperWalk
16. Web3.0 Plants vs Zombies
17. TCOM (Astroboy)
18. Twelve Goblins
19. X-Hero
20. Yuliverse

2.5 Other ecological activities

2.5.1 Kaia Wave

Web3 Maker Program, providing support of $10 million in KAIA tokens.

2.5.2 Line Next

LINE's Web3 company focuses on NFT business.

2.5.3 Kaia Grants

Support for DApps, including LayerZero, OpenSea, ELYSIA, etc.

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. A large number of existing Web2 users introduced: the gateway connecting Web and Web3

4. Global Vision and Ecological Collaboration: From East Asia to the World

5. Low valuation of MC/TVL

6. Layout for the Future: Reshaping the Digital Infrastructure of Finance and Culture

Kaia Chain demonstrates the potential to promote the large-scale application of blockchain through deep cultivation in East Asia, integration of major resources, and a global strategy. Its future development will become an important benchmark in the blockchain industry.