Kaia: With Line and Kakao, two major Asian social giants, and the potential of 250 million users ready to unleash, can it replicate the myth of TON?

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. These two large projects, originating from South Korea's Kakao and Japan's LINE, are merging, which is quite rare in the Web3 ecosystem. On August 29, 2024, the merged Kaia mainnet will officially go live. Kakao and LINE plan to create a giant blockchain in Asia by combining their respective ecosystems and assets, gradually leading the global Web3 market.

Sam Seo, the chairman of the Kaia Foundation, holds a PhD in high-performance computing and has been deeply researching Bitcoin and blockchain since 2017. He served as CKO at KrustUniverse, leading the development and operation of Klaytn. He also worked as the Chief Technology Officer at GroundX(, Kakao's blockchain subsidiary ), and was an assistant computer scientist at Argonne National Laboratory.

The joint support of the two giants Kakao and LINE injects strong momentum into the development of Kaia. Kakao has a usage rate of 96% in South Korea and also has a significant influence in Vietnam. LINE is popular in Japan, Taiwan, and Thailand, and combined, the potential user base of Kaia exceeds 250 million, significantly enhancing global coverage. This vast user base is expected to greatly improve the popularity and acceptance of blockchain technology in the East Asian market, laying the foundation for large-scale applications; thus creating the largest and most vibrant Web3 ecosystem in Asia. Other investors in Kaia also include Hashed, IDG Capital, and others.

1.1.2 Important Milestones

• January 16, 2024: Klaytn and Finschia announce the launch of the unified mainnet plan.
• August 29, 2024: The merged Kaia mainnet officially launches

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 company employs over 17k people, and its operating profit in Q3 2024 is 130.5 billion Korean Won (9348 million USD ), representing a year-on-year growth of 5%. This includes a 7% increase in revenue from the platform division, including Kakao Talk, reaching 943.5 billion Korean Won (7.0763 million USD ).

Klaytn has been designed for DApp developers and enterprises from the very beginning. This ecosystem allows developers to unleash their creativity and enhance user experience, providing a strong technological foundation for Kaia. Klaytn has a cumulative transaction volume of $376 billion, over 29 million Web3 wallet users, more than 240k community members, and an all-time high on-chain TVL exceeding $1 billion, with a strong influence in Singapore and Vietnam.

The South Korean market is already crypto-friendly, and the local exchange Upbit has become a leading exchange in the crypto industry, with Web3 projects also taking pride in being listed on Upbit. Against the backdrop of all Korean users trading cryptocurrencies, the ceiling for Kaia will undoubtedly bring us limitless imagination.

1.1.4 Line and Finschia

LINE, as the most popular communication platform in Japan, covers 70% of the Japanese population and also dominates markets in Thailand, Taiwan, and other regions. The monthly active users in Japan reach 92 million, while the number of users in Thailand exceeds 51 million (, making it the most popular social platform in Thailand ). In Taiwan, the user count reaches 21 million, and there are also 13 million users in the Indonesian market. This high user penetration rate provides a solid foundation for its advertising, payment, and content services. The 2024 Nielsen LINE usage behavior survey shows that 92.1% of Taiwanese people aged 15-65 used LINE in the past seven days, with nearly half of the users being heavy users who check LINE messages an average of 14 times a day.

Compared to other social platforms, LINE's unique ecological integration capabilities are particularly prominent. Users can consume a wealth of content products on LINE, including over 300,000 comic books and nine games that integrate social interactions. This diversification of functions gives LINE a significant advantage in maintaining user engagement. An average weekly usage time of over 4 hours highlights its irreplaceability in users' daily lives.

This comprehensive ecosystem provides Kaia with a unique strategic advantage. LINE users are highly concentrated and active, and its integrated advertising and payment features allow brands and services to accurately reach target audiences. LINE's regional strategy ensures that platform content closely matches users' cultural needs, creating efficient pathways for Kaia's localized promotion.

LINE's payment ecosystem also showcases its potential in the blockchain economy. With 40 million monthly active payment users and an annual transaction volume exceeding $12 billion, LINE Pay has provided users with a seamless digital payment experience. This payment infrastructure, combined with its highly refined advertising capabilities, reaching over 200 million users monthly, provides a natural advantage for blockchain projects to land and expand in the Asia-Pacific market.

Particularly noteworthy is the LINE Miniapp plan, which serves as a bridge between Web2 and Web3. This feature not only allows existing users to easily access decentralized applications but also builds a highly compatible development environment through deep integration of its payment, advertising, and communication ecosystems.

Finschia, a blockchain under LINE, was launched in 2018. After about 5 years of development, it has over 5.6 million Web3 wallet users, a community of more than 170k members, and holds an important position in Japan, Taiwan, Thailand, and Abu Dhabi.

LINE's strategic direction indicates that in the future Web3 world, it will not only be a participant but also a driver and accelerator, helping the entire industry bridge the critical gap from technology to mainstream application.

Currently, Kaia has confirmed that it will launch the SDK for Line mini programs, with the first batch of Line mini program applications expected to be available in January 2025, while meeting regulatory requirements. Regarding Kakao, among the six members of Kaia's council, three are from Kakao's blockchain Klaytn. In addition, Kakao and its affiliates hold about 9.8% of Kaia's total supply and actively participate in its governance. However, the current regulatory uncertainty in South Korea hinders Kakao from playing a more active role in blockchain initiatives, such as launching mini dApps like LINE. Once these regulatory uncertainties are resolved and LINE's mini dApp service is successful, Kakao is expected to fully embrace blockchain integration.

( 1.2 Token Economics

)# 1.2.1 Token $Kaia

The native token KAIA of Kaia plays a core role in the blockchain economy, used to create or execute smart contracts or to pay transaction fees when transferring KAIA. It is not only a means of payment for transactions but also provides the necessary power for the normal operation of the entire system.

1. Incentive Mechanism: Platform customers pay KAIA to incentivize consensus nodes ###Consensus Nodes,CNs###, as these nodes are responsible for verifying transactions and executing smart contracts. Simply put, nodes provide computing power and resources, and users pay KAIA as a reward, which is a mutually beneficial relationship.

2. Promote Development Quality: The cost of using KAIA for payments is proportional to the complexity of the smart contract and resource consumption. If a developer's code is too inefficient or redundant, executing that code will be more expensive. This mechanism encourages developers to optimize code quality and avoid wasting computational resources.

3. Maintain Network Health: CN nodes support network operation by consuming computing power and bandwidth, and receiving KAIA rewards can incentivize more nodes to participate in the consensus process, thereby ensuring the decentralization and stability of the network.

Each new block will automatically issue KAIA tokens, with an initial annual inflation rate of 5.2%. The block reward distribution 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%

This allocation model not only incentivizes network participation but also supports the growth and development of the Kaia ecosystem.

The on-chain governance system implemented by Kaia aims to achieve fairness and inclusivity:

1. Voting rights are proportional to the number of KAIA tokens invested.
2. The voting power cap can prevent the opinions of a minority from being suppressed.
3. Allow delegation of voting rights.
4. All governance proposals are recorded on-chain to ensure transparency.

From the perspective of coin price, Kaia has performed exceptionally well. Since Klay was renamed to Kaia and launched on a certain trading platform, it has been on the rise.

(# 1.2.2 Governance Council

With the advancement of technology driving the rapid growth of the metaverse, decentralized autonomous organizations ) DAOs ### and developers are becoming important forces in the new economic model. Kaia is keeping up with this trend by launching the Kaia Governance Council ( Governance Council, GC ), which consists of 31 trusted early members, most of whom are top institutions. These include: Kakao, a certain trading platform, Google Cloud, GS HomeShopping (, the number one multimedia retailer in South Korea ), LG Uplus (, part of South Korea's largest company LG Corporation ), Hanwha Systems (, South Korea's second-largest non-bank financial group ), Everrich Group (, a real estate developer primarily operating in South Korea, Taiwan, and Southeast Asia ), HashKey (, a leading fintech group headquartered in Hong Kong, focusing on blockchain development ), NEOPLY (, a leading startup accelerator under NEOWIZ, which is a large South Korean online gaming company specializing in blockchain investment ), and others.

Through this choice, the Kaia platform has successfully achieved stable operation of its mainnet, ensuring rapid and efficient advancement of technological stability and operational implementation in the early stages of platform development, laying a solid foundation for subsequent governance model innovation.

Moreover, Kaia has expanded GC membership from traditional enterprises to DAOs and builders to meet the demands of the new era. Kaia's ultimate vision is to become a fully decentralized "DAO of DAOs," unifying the voices of all governance entities through on-chain mechanisms. This is not only a technological innovation but also represents a true transformation of governance structures—empowering all stakeholders with a greater voice and setting a new benchmark for decentralized development in the metaverse.

Kaia's governance framework is not only a core pillar of its platform development but also a key highlight in attracting global developers, communities, and organizations to participate. Through a governance mechanism that combines foresight and flexibility, Kaia is laying a solid foundation for sustainable growth in the blockchain ecosystem.

In addition, Kaia has also been working closely with government departments. For example, the Bank of Korea has chosen its parent company Ground X as the main technology provider for the blockchain-based digital Korean won simulation.

( 1.3 Technical Architecture Principles

Kaia is a highly optimized public blockchain based on BFT) Byzantine Fault Tolerance, which refers to the ability of a decentralized network to achieve consensus even in the presence of malicious nodes or failures. It aims to meet enterprise-level reliability and performance standards.

Kaia Blockchain provides:

1. 1 second block generation and confirmation time.
2. Can process 4,000 transactions per second.
3. Low gas price, about 1/10 of a certain public chain.
4. EVM compatible, supports Solidity contracts.
5. The governance is conducted by the Kaia Governance Committee composed of globally renowned enterprises.

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

1. Core Cell Network ### Core Cell Network, CCN (: Composed of core units ) CC ( responsible for transaction validation, execution, and block creation.
2. Endpoint Node Network ) ENN (: Composed of endpoint nodes ) EN (,负