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

1. Background Overview of Kaia

1.1 Project Introduction

1.1.1 Establishment and Development History

On January 16, 2024, two leading blockchain platforms, Klaytn and Finschia, announced the launch of a unified mainnet. Such a large-scale project merger is quite rare in the Web3 ecosystem, especially considering that these two mainnets originate from major internet giants in South Korea and Japan. On August 29, 2024, the merged Kaia mainnet officially went live. By combining their respective ecosystems and assets, the two companies plan to create a giant blockchain in Asia and gradually lead the global Web3 market.

The chairman of the Kaia Foundation is Sam Seo, who has been deeply involved in Bitcoin and blockchain since 2017 and holds a PhD in high-performance computing. Previously, Sam served as CKO at KrustUniverse, where he was responsible for leading the development and operation of Klaytn. He also held the position of Chief Technology Officer at a blockchain subsidiary and worked as an Assistant Computer Scientist at Argonne National Laboratory.

The joint support of the two industry giants undoubtedly injects strong momentum into the development of Kaia. One company has a usage rate as high as 96% in South Korea and also has a significant impact in Vietnam. The other is favored by users in regions such as Japan, Taiwan, and Thailand. Together, the potential user base of Kaia exceeds 250 million, significantly enhancing its global coverage. With such a large user base, Kaia is expected to greatly improve the popularity and acceptance of blockchain technology in the East Asian market, laying a solid foundation for the large-scale application of blockchain technology; further 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: Announcement of the launch of the unified mainnet plan
• August 29, 2024: Kaia mainnet officially launched

1.1.3 The Two Major Companies Behind It

One is one of South Korea's most popular instant messaging applications, with nearly 49 million monthly active users in Q3 2024, 90% of whom are from South Korea. The company has over 17k employees, and its operating profit for Q3 2024 was 130.5 billion KRW (93.48 million USD), a year-on-year increase of 5%. Among them, the platform segment, including the messaging application, achieved growth, with revenue increasing by 7% to 943.5 billion KRW (707.63 million USD).

Another popular communication platform in Japan covers 70% of the Japanese population and also holds a dominant position in markets such as Thailand and Taiwan. Among them, Japan has a monthly active user base of 92 million, while the number of users in Thailand has exceeded 51 million, in Taiwan it has reached 21 million, and the Indonesian market also has 13 million users. This high user penetration rate provides a solid foundation for its advertising, payment, and content services. For example, a major usage behavior survey conducted by Nielsen in 2024 found that 92.1% of Taiwanese people aged 15-65 used the platform in the past seven days, with nearly half of the users being heavy to moderate users, averaging 14 times a day to check messages.

Compared with other social platforms, the unique ecological integration capability of this platform is particularly prominent. Users can consume its rich content products, including over 300,000 comic books and 9 games that integrate social interaction. This diversification of functions gives the platform a significant advantage in maintaining user engagement. In addition, an average usage time of over 4 hours per week also highlights its irreplaceability in users' daily lives.

This comprehensive ecosystem provides Kaia with a unique strategic advantage. Users are highly concentrated and active, and the integration of its advertising and payment functions allows brands and services to accurately reach their target audience. In addition, the regional strategy ensures a close alignment between the platform's content and the cultural needs of users, which will create an efficient path for Kaia's localized promotion.

Its payment ecosystem also demonstrates potential in the blockchain economy. With 40 million monthly active payment users and over 12 billion dollars in annual transaction volume, it has provided its users with a seamless digital payment experience. This payment infrastructure, coupled with its highly refined advertising delivery capability (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 Mini App program, 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.

Currently, Kaia has confirmed that it will launch the SDK for Mini Apps, with the first batch of applications available in January 25, while meeting regulatory requirements. On the other hand, among Kaia's six council members, three come from the blockchain department of a company. In addition, this company 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 the company from playing a more active role in blockchain initiatives, such as launching mini apps like another company. However, once these regulatory uncertainties are resolved and the Mini App service is successful, the company is expected to fully embrace blockchain integration.

1.2 Token Economics

1.2.1 Token $Kaia

The native token KAIA of Kaia plays a central role in the blockchain economy, used to pay transaction fees when creating or executing smart contracts or transferring KAIA. It is not only a means of payment for transactions but also powers the normal operation of the entire system:

1. Incentive Mechanism: Customers on the platform incentivize Consensus Nodes (CNs) by paying KAIA, as these nodes are responsible for validating transactions and executing smart contracts. In simple terms, the nodes provide computational power and resources, and users pay KAIA in return, forming a mutually beneficial relationship.

2. Promote development quality: The fees paid using KAIA are 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. The rewards of KAIA 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 distribution model can both incentivize network participation and support 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 amount of KAIA tokens invested.
2. The upper limit 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.

From the perspective of coin price, Kaia's performance has been very impressive. Since it was renamed to Kaia and went live on a certain trading platform, it has been on the rise.

1.2.2 Governance Council

With technological advancements driving rapid growth in the metaverse, decentralized autonomous organizations (DAOs) and developers are becoming significant forces in the new economic landscape. Kaia is keeping pace with this trend by launching the Kaia Governance Council (GC), composed of 31 trusted early members, most of whom are top-tier institutions. This includes: two major companies, a trading platform, Google Cloud, GS HomeShopping (the number one multimedia retailer in South Korea), LG Uplus (a subsidiary of South Korea's largest corporation, LG Corporation), Hanwha Systems (the second largest non-bank financial group in South Korea), Everrich Group (a real estate developer primarily active in South Korea, Taiwan, and Southeast Asia), HashKey (a leading fintech group headquartered in Hong Kong focused on blockchain development), NEOPLY (a leading startup accelerator under NEOWIZ, a large South Korean online gaming company specializing in blockchain investment), among others.

Through this choice, the Kaia platform successfully achieved stable operation of the mainnet, ensuring rapid and efficient progress in technology stability and operational implementation during the early stages of the platform's development, laying a solid foundation for the innovation of subsequent governance models.

Furthermore, Kaia has expanded the membership of GC from traditional enterprises to DAOs and builders to meet the needs 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 in governance structure—empowering all stakeholders with a greater voice and setting a new benchmark for the decentralized development of 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 the sustainable growth of the blockchain ecosystem.

In addition, Kaia has also closely collaborated with government departments; for example, the Bank of Korea has chosen its parent company as the main technology provider for the blockchain-based digital 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 reach consensus in the presence of malicious nodes or failures), designed to meet enterprise-level reliability and performance standards.

Kaia Blockchain offers:

1. 1 second block generation and confirmation time.
2. Can process 4000 transactions per second.
3. Low gas prices, 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 companies.

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

1. Core Cell Network (CCN): Composed of core cells (CC) responsible for transaction validation, execution, and block creation.
2. Endpoint Node Network (ENN): Composed of Endpoint Nodes (EN), responsible for processing RPC API (Remote Procedure Call) requests and service chain data.
3. Service Chain Network (SCN): An auxiliary blockchain that operates independently by DApps, connected to the main chain via EN.

These mechanisms make the Kaia blockchain a platform that combines high performance, security, and compatibility, especially suitable for application scenarios that require fast transaction processing, compatibility with the Ethereum ecosystem, and cross-chain interaction needs. Its design meets the convenience needs of developers while supporting user experience in high-frequency trading scenarios, and ensures the reliability and attack resistance of the system through multiple security measures. This is specifically reflected in the following five aspects.

1.3.1 Consensus Algorithm

Consensus algorithm is a mechanism used to reach agreement among a group of participants who do not trust each other. Its core objective is to determine which in a blockchain network.