With Line and Kakao, two Asian social giants, and a potential of 250 million users ready to be unleashed, can Kaia replicate the myth of TON?

1. Kaia’s background overview

1.1 Project Introduction

1.1.1 History of establishment and development

On January 16, 2024, Asia's two leading blockchain platforms, Klaytn and Finschia, announced a major plan: launching a unified mainnet. The merger of such large projects as Klaytn and Finshcia is a very unusual project in the Web3 ecosystem, especially considering that the two mainnets originate from two major Internet giants in South Korea and Japan - Kakao and LINE. On August 29, 2024, the merged Kaia mainnet was officially launched. By combining their respective ecosystems and assets, Kakao and LINE plan to create an Asian giant blockchain and gradually lead the global Web3 market.

The chairman of the Kaia Foundation is Sam Seo. Sam has an in-depth understanding of Bitcoin and blockchain since 2017 and has a PhD in high-performance computing. Previously, Sam served as CKO at KrustUniverse, responsible for leading the development and operations of Klaytn. In addition, he serves as chief technology officer at GroundX (Kakao’s blockchain subsidiary) and as an assistant computer scientist at Argonne National Laboratory.

The joint support of the two giants Kakao and LINE has undoubtedly injected strong impetus into the development of Kaia. Kakao's usage rate in South Korea is as high as 96%, and it also has a significant impact in Vietnam. LINE is deeply loved by users in Japan, Taiwan, Thailand and other regions. Combined with the two, Kaia's potential user base exceeds 250 million, significantly increasing its global coverage. With such a large user base, Kaia is expected to greatly increase the popularity and acceptance of blockchain technology in the East Asian market, laying a solid foundation for the large-scale application of blockchain technology; thereby creating a large-scale and dynamic Asia's largest Web3 ecosystem. Other investors in Kaia include Hashed, IDG Capital, etc.

1.1.2 Important time points

Let’s take a detailed look at Kakao and LINE first.

1.1.3Kakao and Klaytn

Kakao Talk is one of the most popular instant messaging applications in South Korea. It had nearly 49 million monthly active users in Q3 2024, 90% of which were from South Korea. The company has more than 17k employees, and its operating profit in Q3 2024 was 130.5 billion won (US$93.48 million), a year-on-year increase of 5%. Among them, the platform division including Kakao Talk achieved growth, with revenue rising 7% to 943.5 billion won ($707.63 million).

Klaytn has been built for DApp developers and enterprises from the beginning. This ecosystem enables developers to be creative and expand the user experience. This provides Kaia with a strong technical foundation. Klaytn's cumulative transaction volume is US$376 billion, with more than 29 million Web3 wallet users, more than 240k community members, and ATH Onchain TVL reaching more than US$1 billion. In addition, it also has a strong influence in Singapore and Vietnam.

The Korean market is already a crypto-friendly market, and its local exchange Upbit has become a leading exchange in the crypto industry. The Web3 project is also proud to be able to log in to Upbit. Against the backdrop of widespread currency speculation among South Korean users, Kaia’s ceiling will undoubtedly bring us unlimited imagination.

1.1.4Line and Finschia

As the most popular communication platform in Japan, LINE covers 70% of the Japanese population and also dominates markets such as Thailand and Taiwan. Among them, the monthly active users in Japan reached 92 million, while the number of users in Thailand exceeded 51 million (it is the most popular social platform in Thailand), the number of users in Taiwan reached 21 million, and the Indonesian market also has 13 million users. This high degree of user penetration provides a solid foundation for its advertising, payment and content services. For example, Nielsen's LINE usage behavior survey in 2024 found that the proportion of Taiwanese people aged 15-65 using LINE in the past seven days was as high as 92.1%. Nearly half of them are moderate and heavy users, and they use LINE 14 times a day on average. Check the message.

Compared with other social platforms, LINE’s unique ecological integration capabilities are particularly outstanding. Users can consume its rich content products on LINE, including 300,000+ comic books and 9 games that integrate social interaction. This diverse functionality gives LINE a significant advantage in keeping users active. In addition, the average usage time of more than 4 hours per week also highlights its irreplaceability in users' daily lives.

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

LINE's payment ecosystem also demonstrates its potential in the blockchain economy. With 40 million monthly active payment users and annual transaction volume exceeding US$12 billion, LINE Pay has provided its users with a seamless digital payment experience. This payment infrastructure, coupled with its highly refined advertising capabilities (the average number of users reached per month exceeds 200 million), provides natural advantages for the implementation and expansion of blockchain projects in the Asia-Pacific market.

Of particular concern is the LINE Miniapp plan, a bridge connecting Web2 and Web3. This feature not only allows existing users to easily access decentralized applications, but also builds a highly compatible development environment by deeply integrating its payment, advertising and communication ecosystem.

Finschia, a blockchain owned by LINE, was launched as early as 2018. After about 5 years of development, it has more than 5.6 million Web 3 wallet users and 170k+ community members, and occupies an important position in Japan, Taiwan, Thailand and Abu Dhabi. .

LINE's strategic direction shows that in the future Web3 world, it will not only be a participant, but also a promoter and accelerator, helping the entire industry cross the key gap from technology to mainstream applications.

At present, Kaia has confirmed that it will launch the Line mini program SDK and launch the first batch of Line mini program applications in January 25, while meeting regulatory needs. As for Kakao, among Kaia's six council members, three are from Kakao's blockchain Klaytn. Additionally, Kakao and its affiliates hold approximately 9.8% of Kaia's total supply and actively participate in its governance. However, current regulatory uncertainty in South Korea prevents Kakao from taking a more active role in blockchain initiatives, such as launching mini-dApps like LINE. However, 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

Kaia's native token KAIA plays a central role in the blockchain economy and is 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 provides power for the normal operation of the entire system:

1. Incentive mechanism: Clients of the platform incentivize Consensus Nodes (CNs) by paying KAIA, as these nodes are responsible for verifying transactions and executing smart contracts. Simply put, nodes provide computing power and resources, and users pay KAIA in return. This is a mutually beneficial relationship.
2. Promotes development quality: The fees paid using KAIA are directly proportional to the complexity and resource consumption of the smart contract. If a developer's code is too inefficient or redundant, it will be more expensive to execute the code. This mechanism encourages developers to optimize code quality and avoid wasting computing resources.
3. Maintain network health: CN nodes consume computing power and bandwidth to support network operation. Obtaining KAIA rewards can encourage more nodes to participate in the consensus process, thus ensuring the decentralization and stability of the network.

KAIA tokens are automatically issued with each new block, with an initial annual inflation rate of 5.2%. Block rewards are distributed 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 both incentivizes network participation and 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 power is proportional to the number of KAIA tokens invested.
2. Caps on voting rights prevent minority opinions from being suppressed.
3. Delegation of voting rights is allowed.
4. All governance proposals are recorded on-chain to ensure transparency.

From the perspective of currency prices, Kaia’s performance is also very impressive. Klay has been on a tear ever since it was renamed to Kaia and listed on Binance.

1.2.2 Governance Council

As technological advancement drives the rapid growth of the Metaverse, decentralized autonomous organizations (DAOs) and developers are becoming important forces in the new economic form. Kaia followed this trend and launched the Kaia Governance Council (GC), which consists of 31 trusted early members, most of whom are top institutions. Including: Kakao, Binance, Google Cloud, GS HomeShopping (South Korea’s No. 1 multimedia retailer), LG Uplus (part of South Korea’s largest enterprise LG Corporation), Hanwha Systems (South Korea’s second largest non-bank financial group), Everrich Group (a real estate developer with main businesses in South Korea, Taiwan and Southeast Asia), HashKey (a leading financial technology group headquartered in Hong Kong, focusing on the development of blockchain), NEOPLY (NEOWIZ One of its leading startup accelerators, NEOWIZ is a large Korean online gaming company specializing in blockchain investments) and more.

Through this choice, the Kaia platform has successfully achieved stable operation of the main network to ensure rapid and efficient advancement of technical stability and operational implementation in the early stages of platform development, laying a solid foundation for subsequent innovation in governance models.

Not only that, Kaia will also expand GC membership from traditional enterprises to DAOs and builders to adapt to the needs of the new era. Kaia’s ultimate vision is to become a completely decentralized “DAO of DAOs”, where the voices of all governance entities can be expressed uniformly through on-chain mechanisms. This is not only a technological innovation, but also represents a real change in the governance structure - giving all stakeholders a greater say and setting a new benchmark for the decentralized development of the Metaverse.

Kaia’s governance framework is not only a core pillar of the development of its platform, but also a key highlight in its ability to engage developers, communities and organizations around the world. Through a forward-looking and flexible governance mechanism, Kaia is laying a solid foundation for the sustainable growth of the blockchain ecosystem.

In addition to this, Kaia also works closely with government departments. For example, the Bank of Korea has selected its parent company Ground X as the main technology supplier for blockchain-based digital won simulation.

1.3 Principles of technical architecture

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 handle 4,000 transactions per second.
3. Low gas price, about 1/10 of Ethereum.
4. Compatible with EVM and supports Solidity contracts.
5. Governance is governed by the Kaia Governance Committee composed of world-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 verification, execution and block creation.
2. Endpoint Node Network (ENN): It consists of endpoint nodes (EN) and is responsible for processing RPC API (remote procedure call) requests and service chain data.
3. Service Chain Network (SCN): An auxiliary blockchain run independently by DApp, connected to the main chain through EN.

These mechanisms make the Kaia blockchain a platform with high performance, security and compatibility, especially suitable for application scenarios that require fast transaction processing, compatibility with the Ethereum ecosystem, and cross-chain interaction requirements. Its design can not only meet the convenience needs of developers, but also support user experience in high-frequency trading scenarios. At the same time, it ensures the reliability and attack resistance of the system through multiple security measures. Specifically reflected in the following five aspects.

1.3.1 Consensus Algorithm

A consensus algorithm is a mechanism used to reach agreement among a group of participants who do not trust each other. Its core goal is to decide which blocks are "valid" in a blockchain network and ensure the stability and reliability of the entire system. In blockchain technology, the performance of the consensus algorithm directly affects the efficiency of the network and plays a vital role in the user experience of blockchain applications. For example: the more efficient the consensus algorithm, the faster the transactions processed by the blockchain.

PBFT (Practical Byzantine Fault Tolerance) is a special consensus algorithm that directly confirms the validity of blocks by allowing nodes to communicate with each other, thus avoiding fork problems. However, PBFT also has limitations. As the number of participating nodes increases, the communication volume between nodes increases exponentially, so PBFT is suitable for networks with a limited number of nodes.

In order to solve the communication bottleneck problem of PBFT and achieve high performance at the same time, Kaia uses an optimized version of Istanbul BFT. In Kaia, there are three types of nodes: CN (consensus node), PN (proxy node) and EN (endpoint node).

1. Consensus Node (CN): Responsible for generating blocks and managed by the Core Node Operator (CCO).
2. Proxy Nodes (PN): transfer data between consensus nodes and users. Provides network interface, transmits transaction requests and propagates blocks.
3. Core unit (CC): consists of a consensus node (CN) and two proxy nodes (PN).
4. Endpoint (EN): Acts as a network endpoint, handling API requests and data processing. Connect users to the network and provide access services.
5. Bootnode: A special node operated by Kaia to help new nodes join the network.

Since verification and consensus are performed on a per-block basis, forks cannot occur and the finality of the block is immediately guaranteed once consensus is reached.

Furthermore, the problem of increased communication volume in the BFT algorithm is also addressed by utilizing a randomly selected committee. CN collectively forms a committee, and when each block is generated, a portion of them are selected as committee members using a VRF (verifiable random function). The main process is:

1. Random Selection Committee: Uses a mathematical method (called VRF, Verifiable Random Function) to fairly and randomly select a group of people who are responsible for generating and verifying blocks. This group of people is called the "committee", which includes "proposers" (responsible for proposing new blocks) and "validators" (responsible for checking whether the block is compliant). The role of VRF is to ensure the fairness of the election while ensuring that the entire process is verifiable but unpredictable, making it difficult for malicious nodes to attack.
2. Generate block: The selected proposer will generate a new block. Blocks contain transaction data that need to be processed.
3. Verification and signing: Validators on the committee review whether the block submitted by the proposer is correct. If more than two-thirds of the validators approve and sign, the block is added to the blockchain.

Since consensus information is only exchanged among committee members, the communication volume will not exceed the design level even if the total number of CNs increases.

1.3.2 Block Generation and Propagation

Kaia's block generation and propagation design is simple and efficient, ensuring the stability and scalability of the system. The specific features are as follows:

1. Quickly generate blocks: The goal of each round of operation is to generate a block within 1 second, which is a highly efficient design in the blockchain field.
2. Random but deterministic election process: Although the election of proposers and committee members is random, its process is determined by an algorithm, and all nodes can verify this randomness. This design both increases security and ensures fairness.
3. Two-thirds signature rule: New blocks can only be added to the blockchain after more than two-thirds of the committee members have signed and agreed. This mechanism ensures the credibility and non-tamperability of the block.
4. Multichannel Propagation: In order to avoid network congestion, Kaia adopts a method of independent propagation of blocks and transactions, similar to transmitting different information on different lanes. Blocks and transactions are each propagated through independent channels, greatly reducing delays and conflicts.

1.3.3Kaia Virtual Machine (KVM)

Kaia's virtual machine (KVM) is the core component for running smart contracts. Its design philosophy is compatibility and scalability. Its main features include:

1. Based on Ethereum Virtual Machine (EVM):

Kaia directly inherits the architecture of the Ethereum Virtual Machine, so all Ethereum smart contracts can run seamlessly on Kaia.

2.Extended functions:

On the basis of supporting Ethereum opcodes (smart contract execution instructions), Kaia has added some specialized precompiled contracts. These contracts are optimized code modules that improve the efficiency of specific operations.

3. Compatible with Ethereum development tools:

Developers can use popular Ethereum development tools such as Remix, Hardhat, and Foundry, with almost no need to learn new tools.

4. Easy migration:

If developers have already developed smart contracts on Ethereum, they can deploy the contracts to the Kaia platform with only minimal modifications. This reduces development costs and migration risks.

This makes Kaia an extension of the Ethereum ecosystem and can better capture the majority of EVM developers.

1.3.4 Security Measures

Kaia's virtual machine (KVM) is the core component for running smart contracts. Its design philosophy is compatibility and scalability. Its main features include:

In order to improve the security of the system, Kaia has adopted a series of designs:

1. Randomly select the proposer:

A VRF (Verifiable Random Function) is used to randomly select block proposers. This increases security by making it impossible for an attacker to predict who will be the proposer in the next round.

2. Key separation:

Validators use two different keys:

• Verification key: used to participate in block verification.
• Reward key: used to claim rewards.

This design can effectively prevent hackers from obtaining verification permissions and rewards at the same time after attacking a certain key.

3. Transparent verification process:

Every member of the committee will verify the new block, and all signature records are public and anyone can check the verification results.

These measures ensure that the Kaia system can still maintain security and stability in the face of hackers or malicious nodes.

1.3.5 Interoperability

One of Kaia’s design goals is to achieve seamless interaction with other blockchains, specifically:

1. EVM compatibility: Kaia supports Ethereum’s smart contract language (Solidity), and developers can easily migrate applications on Ethereum to Kaia.

2. Cross-chain capabilities: Kaia can interact with other EVM-SDK-based blockchains to achieve cross-platform transactions and smart contract execution. Currently, the cross-bridge Butter Network supported by Map Protocol has been connected to Kaia's cross-chain.

3. Support multi-chain ecology: Not limited to Ethereum, Kaia has also designed a mechanism that can cooperate with other blockchain systems.

This makes Kaia a flexible blockchain platform that can meet the needs of a variety of cross-chain scenarios, such as cross-chain asset transfers in decentralized exchanges (DEX), cross-chain smart contract calls, etc.

1.4 Competitors

Since they all start from social media and divert traffic from Web2 to Web3, here we focus on comparing Kaia with Telegram-based TON.

Telegram, which has more than 900 million users, provides games including Catizen and Hamster Kombat through the Open Network (TON) blockchain, and pioneered the delivery of web3 through social media.

The story of TON can be traced back to 2017, proposed by Telegram founders Pavel Durov and Nikolai Durov. The original intention of the project is to deeply integrate blockchain technology with Telegram's social ecosystem to create an ideal platform for decentralized applications (DApp) while meeting the needs of high-speed and secure transactions. In 2018, Telegram raised $1.7 billion for the TON project through private placements. However, in 2019, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Telegram, accusing it of issuing Gram tokens as unregistered securities. This legal turmoil eventually led Telegram to announce in 2020 that it would abandon the TON project.

Despite Telegram's withdrawal, TON's open source community did not stop, but continued the project's vision and renamed it The Open Network (TON). In 2021, the TON mainnet will be officially launched, marking the birth of a new decentralized ecosystem focused on efficient and scalable blockchain infrastructure.

TON is designed with high performance and strong scalability as its core, using sharding technology (Sharding) and Proof-of-Stake (PoS) consensus mechanism to support large-scale parallel transaction processing. In addition, TON offers a range of innovative features, including:

• TON DNS: Provides an easy-to-remember address naming system for users and applications, reducing the complexity of blockchain interactions.
• TON Storage: Decentralized storage solution that meets file security and data storage needs.
• Instant payment channel: Provides an extremely low-latency payment network for high-frequency trading users.

These technical features not only provide convenience to TON developers and users, but also lay the foundation for the richness of its ecosystem.

As of 2024, TON has attracted more than 800 applications to come online, including stable currency solutions, NFT platforms and decentralized finance (DeFi) applications. Especially in the field of stablecoins, the supply of USDT on the chain has grown rapidly, injecting strong liquidity into its ecosystem. The more representative ones include:

• Tap to Earn mini-games: "Light chain games" such as Notcoin and Hamster Kombat, the most representative chain games on the TON chain, attracted a large number of users, with the number of daily active users once exceeding 5 million. This type of game is characterized by "low learning cost and high ease of use", which is very suitable for fragmented time play and has strong appeal in the TON chain ecosystem.
• Decentralized Finance (DeFi): TVL (Total Locked Volume) on the TON chain has grown significantly. Currently, the locked volume has exceeded US$600 million, making it one of the major competitors in the DeFi field.
• NFT and SocialFi applications: The TON chain is based on Telegram's traffic portal. Through NFT, SocialFi and other application scenarios, it deeply integrates the concept of Web3 into the social field, forming an ecological application system that is both entertaining and interactive.

In addition, TON has successfully attracted a large number of developers and decentralization enthusiasts with its global community base and good technical performance.

However, TON has also experienced challenges, such as experiencing brief infrastructure outages in the face of high network activity. This reflects that the project needs further optimization in terms of development potential and technical stability. The main comparisons are as follows:

1.5 Preliminary value assessment

Although TON still maintains global influence in decentralization and technological innovation, KAIA's localization strategy and strong user base have given it an irreplaceable position in the Asian market. KAIA is not only an important player in the East Asian blockchain ecosystem, but may also become a key force in promoting the popularization of Web3 applications in the future.

We compared the following indicators. Among them, judging from the MC/TVL indicator, KAIA’s current valuation is significantly lower than TON, implying that its market positioning and localization strategy have not yet been fully quantified, and its capital market potential has not yet been fully tapped, especially its reliance on LINE and The social and payment dividends released by KakaoTalk's huge user ecosystem have not yet been fully converted into capital market value. TON's MC/TVL ratio shows the market's high recognition of its technical capabilities and global expansion vision, but its high valuation may mean that its growth space is gradually narrowing.

In addition, KAIA's current valuation may not fully reflect its strategic significance in the implementation of Web3 applications. For example, through deep integration with the existing social payment system, KAIA has achieved a seamless connection between innovative scenarios such as DeFi and NFT and users' daily behaviors. This endogenous growth model provides natural stickiness and vitality for its ecological development.

However, whether this potential can be truly realized still needs to wait for the implementation of specific application scenarios. In particular, the LINE mini app planned to be launched in Q1 of 2025, as an important step for KAIA to expand the influence of Web3, will become an important opportunity to test its ecological value. This milestone is not only related to whether KAIA can fully unleash its ecological potential, but will also further verify whether it can surpass other competitors in the East Asian market and become an irreplaceable blockchain solution provider.

2. Kaia’s Ecosystem

2.1DEFI track

In the real world, economic activities often rely first on social infrastructure (such as national infrastructure) and natural infrastructure (such as the natural environment). On this basis, financial infrastructure maximizes the efficiency and influence of economic activities by providing services such as capital lending and becoming a catalyst for economic development.

However, the development path of the blockchain world is completely different from that of the real world. Recognized leading blockchain networks such as Ethereum, Arbitrum, Optimism, BNB and Solana all first built the DeFi ecosystem of financial infrastructure, and then gradually promoted the implementation of DApps (decentralized applications) in other industries. Through functions such as capital lending, token exchange, and reward mechanism design, DeFi provides necessary liquidity support for various DApps, allowing them to establish a foundation on the chain. In other words, in the blockchain world, the financial infrastructure of the network has become a prerequisite and an indispensable foundation for the accumulation of digital products and ecological development.

This vision driven by DeFi as its core is helping Kaia become an important infrastructure for the next generation blockchain network. To this end, Kaia launched the D2I (DeFi to Infrastructure) plan.

During the DeFi summer of 2021, Kaia attracted a large amount of funds through liquidity mining. However, the bursting of the on-chain economic bubble in 2022 has led to a significant shrinkage in the ecological scale, and Kaia's competitiveness has also been affected to a certain extent. The D2I program aims to quickly revitalize this underutilized ecosystem through incentives and provide financial infrastructure support for new DApps after chain mergers. In the long term, the core goal of the plan is to comprehensively reshape Kaia's DeFi ecosystem and help it rise again.

In the first half of 2024, Kaia selected three DEX partners through the D2I program: two DEXs based on v3 AMM (spot) - Dragonswap and Kaiaswap, and one DEX based on coverage AMM (spot) - CapyBara. Although Kaiaswap recently exited the ecosystem, Dragonswap and CapyBara have maintained an active pace of construction. So far, these teams have achieved the following results:

• Cumulative transaction volume: more than US$710 million;
• Total Locked Volume (TVL): over $39 million;
• Number of transactions: more than 3.1 million completed;
• User growth: cumulative users exceed 260,000;
• Ecological contribution: 245,000 KAIA destroyed.

It is worth noting that the transaction volume of $KAIA on the DEX on the chain has been equivalent to that of Binance, indicating that Kaia’s DeFi ecosystem is gradually recovering.

With the two spot DEX teams selected through the D2I program in the first half of 2024, Kaia plans to introduce Avalon Finance and, if necessary, a main DEX team capable of handling institutional liquidity. The DeFi ecosystem is constantly evolving, transforming from complex “funding building blocks” such as revenue aggregators and leveraged liquidity mining to derivatives based on ecosystem native tokens and stablecoins. This change is consistent with growing institutional needs. As the core financial infrastructure (spot DEX and currency markets) gradually stabilizes, Kaia will focus on developing derivatives based on native currencies and stable currencies (such as LSDfi, LRTfi and revenue-stripping derivatives). Its primary goal is to increase the market share of LSD and LRT so that Kaia's native currency can play a more active role in the DeFi ecosystem.

The D2I plan demonstrates Kaia’s strategic vision in the revitalization of the DeFi market. Through precise incentive mechanisms and collaboration with strong ecological partners, Kaia not only solves current core problems, but also lays a solid foundation for future development. With the gradual improvement of core financial infrastructure and derivatives markets, Kaia is expected to stand out in the increasingly fierce blockchain competition and become a DeFi solution provider trusted by enterprises and users.

In the future, D2I builders will develop from simple DEX platforms to comprehensive platforms. They are also constantly adding new features, such as Launchpads, Meme platform, liquidity manager, lottery and perpetual futures. These powerful infrastructures now allow all DApps in the Kaia ecosystem, including the upcoming Mini DApp on Line, to easily build an on-chain ecosystem through these functions.

2.1.1Neopin

Project Overview: NEOPIN was established in 2021. It is a "permission-based DeFi protocol" owned by the Korean gaming giant Neowiz and has the advantages of both CeFi and DeFi. It is the first Defi in the Kaia ecosystem. Committed to building a bridge between traditional finance and DeFi protocols for users within a compliance framework. NEOPIN was selected into the innovation program of the Abu Dhabi Investment Office and is cooperating with local government agencies to develop the DeFi regulatory framework. It is a very rare DeFi service provider that has received regulatory licenses and actively embraces regulation to ensure that long-term development is not restricted. The current TVL has reached $240 million, supports 59 tokens, and has 22 nodes

X: @NeopinOfficial

2.1.2 Lair Finance

Project Overview: Lair Finance is a Kaia liquidity staking protocol designed to provide users with decentralized finance (DeFi) income opportunities. Through its unique token economic model and staking mechanism, users can participate in liquidity provision and asset appreciation plans on the platform, obtain more KAIA token rewards, and achieve sustainable financial returns.

X: @LairFinance

2.1.3 CapybaraExchange

Project Overview: The first and largest DEX on the kaia chain. Characterized by ultra-high capital efficiency, transparency and community priority. Its TVL has grown significantly in the last 2 months and has exceeded US$40 million.

X: @CapybaraDEX

2.1.4 Avalon Labs

Project Overview: Avalon Labs (formerly Avalon Finance) is the leading lending ecosystem with Bitcoin at its core, uniquely positioned at the intersection of DeFi, CeDeFi and RWA (Real World Asset) lending. By connecting these three key areas, Avalon Labs has become a cornerstone of the rapidly growing decentralized finance space. Avalon Labs chose to build its products on the Kaia chain, a decision based on the high degree of alignment between the two's core values. Kaia’s focus on community-driven, sustainable development and simplified user experience coincides with Avalon’s vision in the field of decentralized finance (DeFi). Avalon Labs can bring its existing 80,000-90,000 active user base and significant total value locked (TVL) to the Kaia chain. Through this move, Kaia Chain’s influence will expand beyond the Asia-Pacific region and penetrate into multiple global market segments, thereby expanding its influence in the international blockchain ecosystem.

X: @avalonfinance_

2.1.5 DragonSwap

Project Overview: DragonSwap is the DeFi central hub on Sei, supporting AMM, prediction markets, and LST. DragonSwap was designed to be user-friendly and Sei community-oriented, and has now developed into the highest-performing parallelized liquidity center running on Sei V2. Currently, TVL has exceeded US$55 million, with nearly 120,000 users, and ATH as high as US$700 million. On March 8, 2024, DragonSwap was selected as a partner of the Kaia Foundation (formerly Klaytn Foundation) D2I program, committed to using the D2I liquidity incentive mechanism to promote the flourishing development of the DeFi ecosystem on Klaytn.

X: @dragonswap_dex

2.2 Payment track

2.2.1 Alchemy Pay

Project Overview: Established in Singapore in 2018, Alchemy Pay is a payment gateway that seamlessly connects cryptocurrencies and global fiat currencies for businesses, developers and users. The Alchemy Pay Ramp solution integrates with platforms and DApps via plugins or APIs, providing an easy transition from fiat to cryptocurrency. Alchemy Pay supports payments in 173 countries: Visa, Mastercard, Discover, Diners Club, Google Pay, Apple Pay, popular regional mobile wallets, and domestic transfers, with a focus on emerging markets. It can also send money to users in more than 50 local fiat currencies. Just recently, Kaia has partnered with Alchemy Pay to provide a zero-fee $KAIA bridge service. You can seamlessly purchase $KAIA using local legal currency through bank cards or mobile wallets, and enjoy the ultimate convenience.

X: @AlchemyPay

2.3AI track

2.3.1 FlareAI

Project Overview: FlareAI is the first artificial intelligence-driven DApp launched on the Kaia blockchain. This marks the fusion of cutting-edge artificial intelligence technology and Kaia’s powerful blockchain infrastructure, setting a new standard for innovation in decentralized ecosystems. FlareAI aims to revolutionize the way artificial intelligence is integrated with blockchain technology, solving key challenges in artificial intelligence development such as data quality, efficiency and privacy. By leveraging Kaia's ultra-low latency and high-speed infrastructure, FlareAI provides developers and users with an unprecedented experience in creating and interacting with AI-driven solutions.

X: @flareai_io

2.3.2 FDN

Project Overview: FDN is an AI face recognition network that takes advantage of the incentive characteristics of Web3 to better obtain facial data, thereby exerting value in AIGC generation of 3D character images, advertising and marketing and other scenarios. At the same time, blockchain technology is used to protect the privacy of user data. FDN has entered the first phase of Kaia Wave projects and entered the acceleration programs of Web3Labs and Kucoin.

X: @project_fdn

2.4 MINI DAPPS on LINE

In the Web3 Game universe of 2024, Ton joined hands with Telegram to lead a group of Mini Apps to create a new business model. Relying on Telegram's astonishing 900 million users, Web3 Game has gained a huge number of users and interactions that we have never imagined. Recently, LINE has also announced the first list of Mini Dapps to be launched. We will introduce them below:

1. Bombie: A meme game published by Pluto Studio in which you shoot zombies to obtain airdrop rewards. It has gained 7 million game users and US$10 million in game revenue within 3 months of its release. Bombie is the world's first mini-game that spans the two major social platforms of Telegram and LINE. It is planned to be launched on the LINE Dapp Portal in January 2025. Users will be able to enter, play and accumulate user rewards directly through LINE Messenger.

X: @Bombie_xyz

2.Bullet Storm: An innovative arcade shooter that combines social engagement and reward-driven gameplay, attracting millions of players around the world.

X: @_KultGames

3. Captain Tsubasa (Minttown): Developed by the software company MintTown, it is a mini-game based on the legendary Japanese football anime IP "Captain Tsubasa".

X: @TsubasaRVonTG

4.Contentverse (Wizzwood): The first team to integrate Web2 social platform with Web3 games. Wizzwoods is a pixel-style farm placement game that combines cross-chain technology and SocialFi elements.

X: @Wizzwoods_game

5. Elderglade: Elderglade is an AI-driven fantasy world game developed by blockchain game developer W3Forge. Its mobile game was officially launched on Telegram on September 23. W3Forge is the studio behind zkRace (165x ATH), ranked in the top 20 global IDOs of 2021 by CoinMarketCap and ranked in the top 5 on the DAO Maker launchboard.

X: @Elderglade

6.Frog Defense: Frog defense mini-game. Debuts on Kaia blockchain and LINE for the first time, bringing Frog Pikeman, a popular TikTok game with 1.7 million fans, into the Web3 gaming space. As LINE's first tower defense game, Frog Defense combines engaging gameplay with the viral appeal of a meme, creating an exciting entry point for millions of users to explore the rewarding potential of blockchain gaming.

X: @FrogDefense

7.Futr: Prediction market platform. This is where real-world results and social connections meet. Futr is designed for collaboration, allowing users to predict events, be rewarded for accurate insights through Futr tokens, and participate through its active social media hub. Build friendships, form tribes, and win together in a creator-driven ecosystem that makes predictions fun, social, and rewarding.

X: @thefutr_

8. Gee: Built by a community entrepreneurial studio to cultivate unique digital companions on the Kaia blockchain.

X:@dokyoworld

9. Goblin Master: Goblin Master enables brands to create their own immersive digital realms that engage audiences with engaging gameplay and unique rewarding experiences. Create a game world full of magical tasks and imagination.

X: @GoblinMasterTon

10. Goblin Tycoon: Developed exclusively by Digital Fire Studios for LINE Messenger, it is a casual idle game in which players can develop the Goblin empire, obtain powerful weapons, upgrade resources, and play in a fun and addictive game. Fight epic bosses during the adventure.

X: @GoblinTycoonZoH

11. Heroic Arena: Heroic Arena interprets ACG culture from a new perspective and creates LINE's first anime-style click battle game (loved by millions of players around the world). Players can not only unlock a collection of exquisite anime character NFTs, but can also use and trade the studio's future Heroic IP derivatives. A series of ACG games centered on NFT assets + $HAT will be developed for LINE fans.

X: @heroicarenagame

12. KeitoKun: KeitoKun is a one-stop entertainment app platform on Kaia and LINE. KeitoKun places a strong emphasis on community-driven growth and decentralized innovation, transforming entertainment into an immersive and rewarding journey for users. Will be launched on Kaia and LINE in January 2025.

X: @KeitoKunyarn

13. Midnight Survivors: The first gacharoguelike game on LINE, powered by KaiaChain, blends intense survival gameplay with a rewarding gacha system, exclusive in-app rewards, and the opportunity for players to earn money through its innovative in-game airdrop experience.

X: @Survivors_gg

14. Shin Chan's Match Daily: Dive into a quirky world that blends match-3 puzzles and spot-the-difference challenges, featuring the iconic Crayon Shin-chan world. Created by a subsidiary of GGI, it is the world's leading blockchain game publishing platform and content community.

X: @MIXMARVELGAME

15. SuperWalk: A healthcare and wellness portal Dapp for non-crypto users that seamlessly blends fitness habits and tangible rewards with over 300,000 users.

X: @SuperWalk_

16. Web3.0 Plants vs Zombies: Web3 Plants vs Zombies combines innovative merge and upgrade mechanics with classic tower defense gameplay. Players collect and deploy powerful cards, build strategic defenses, fight waves of enemies, and ultimately encounter epic bosses. Featuring dynamic progression, challenging levels and vivid visuals, the game offers modern gamers an engaging experience that redefines tower defense.

X: @TelgatherGames

17. TCOM (Astroboy): TcomArena is a top action-adventure game that combines classic action role-playing game (ARPG) elements with innovative gameplay. Players will play the legendary characters Astro Boy and Three-Eyed Boy and embark on a thrilling adventure. By defeating hordes of enemies, unlocking powerful skills and upgraded attributes, players will grow in constant challenges and strive to build the world's largest Web3.0 IP open platform.

X: @ACG_WORLDS_

18. Twelve Goblins: It is a merged puzzle game from the Web3 project "Wizardry BC Project", which utilizes Drecom's IP "Wizardry".

X: @TwelveGoblins

19. X-Hero: Developed by Digital Fire Studios, X-Hero is a variant of the tower defense game that allows players to summon heroes, strategize defenses, and battle relentless waves of monsters in action-packed and addictive gameplay. Combat.

X: @DigitalfireStu

20. Yuliverse: Yuliverse is a gamified social metadata platform that leverages location-based services technology to transform users’ lifestyles into crypto assets.

X: @TheYuliverse

2.5 Other ecological activities

2.5.1 Kaia Wave

In September this year, Kaia Wave was officially launched, a Web3 maker program jointly developed by the Kaia Foundation and LINE NEXT, providing Web3 builders with the opportunity to connect with more than 200 million LINE users. Kaia Wave will provide up to $10 million worth of KAIA tokens, marketing support, venture capital connections and user experience improvement tools to help promote DApps across Asia.

Since the launch of the Kaia Wave program, 400 project teams have participated. The Kaia Foundation and LINE NEXT team will prioritize projects that have the potential to leverage LINE Mini DApp UX infrastructure.

The picture below shows the grand event of Wave held in Thailand in November.

2.5.2 Line Next

Kaia also often co-hosts various offline activities with LINE NEXT, such as the Kaia Demo Day project display event held just last month, Creator Alliance Assemble, etc. LINE NEXT is a dedicated Web3 company under LINE that focuses on NFT business. In 2023, it received an investment of up to US$140 million from private equity fund operator Crescendo Equity Partners and its consortium.

2.5.3 Kaia Grants

Kaia has launched multiple projects and provided a series of generous support and professional help for DApps. The following are some projects that have received Kaia Grant, including some well-known projects such as LayerZero, OpenSea, ELYSIA, etc.

Kaia Ecosystem Fund

KEF focuses on ecological construction, covering service rewards, developer community cultivation, infrastructure support, indirect investment, and the operation of the governance committee. The funds come from 25% of the total KAIA issued when the block is created. It operates transparently, with all budget and usage details subject to approval by the governance committee and made public.

Kaia Infrastructure Fund

KIF focuses on supporting mainnet and infrastructure research and development, ecological acceleration (providing financial support for small Kaia blockchain ecosystem partners, attracting new GC members, and providing market liquidity, etc.) and foundation operations. It is also operated by the newly added KAIA 25% provides support to ensure efficient and transparent execution of funds through strict internal control mechanisms.

Ignite on Kaia

The program aims to help achieve seamless developer onboarding by providing DApp developers with pragmatic market support in terms of technology and business. The IOK program allows DApp developers to focus on product development, while industry experts take care of other important aspects such as wallets, marketing, security tools, API nodes, NFT markets, Oracles, development outsourcing, etc. Within this program, especially for Go-To-Market, the IOK Fund helps projects cover part of their marketing costs.

3. Summary of highlights

In the global Web3 ecosystem, KAIA is like a rising star. Starting from the East Asian market, it has gradually built a set of blockchain solutions with regional advantages through precise positioning, technological innovation and ecological integration. Through the previous summary, we mainly have the following views:

1. Unique positioning: Giants join forces to create the cornerstone of East Asia’s blockchain ecosystem

Kaia Chain was born out of the cooperation and support of two major technology giants - Kakao and LINE, and is one of the most ambitious blockchain projects in the East Asian market. This alliance not only provides technical resources and capital support, but also brings unparalleled user potential to Kaia. The total user base of more than 250 million provides Kaia with a unique growth soil. This deep user base enables KAIA to naturally integrate blockchain services into social payment scenarios that users are familiar with, creating a localized Web3 ecological experience. For users accustomed to Asian social culture, KAIA is not an unfamiliar technology platform, but an organic extension of their daily lives.

2. Asset scale and ecological breadth: Asia’s largest Web3 network

Kaia Chain unifies the two major networks Klaytn and Finschia, and its assets exceed US$75 billion, making it an unrivaled giant in the Asian blockchain field. More importantly, Kaia has built a rich ecosystem covering more than 360 DApps, covering various fields such as decentralized finance (DeFi), NFT, games and social networking. This not only makes Kaia one of the largest Web3 ecosystems in East Asia, but also demonstrates its ability and diversified potential to build applications across multiple industries.

3. Introduce a large number of existing users of Web2: the portal connecting Web and Web3

Not only does Kaia focus on building a technologically advanced blockchain network, it also builds a low-threshold Web3 entrance for users by launching innovative products such as LINE MiniApp. The barrier to entry for users has been significantly lowered with the introduction of the "Kaia Wave" program. This plan invests US$10 million to support developers and attract large-scale ordinary users into the Web3 ecosystem through seamless Web2 touchpoints (such as Line Mini DApps). Kaia's mission is to transform "complex blockchain technology" into a "one-click user experience" so that Web3 can truly integrate into mainstream society.

4. Global vision and ecological collaboration: from East Asia to the world

Kaia leverages the strong positions of Kakao and LINE in the Asian market and expands its influence globally. Especially in the Middle East market. Its headquarters is located in Abu Dhabi, and its strategic location shows its focus on connecting markets in Asia, the Middle East, and Europe and the United States. At the same time, Kaia actively cooperates with leading international DeFi projects and attracts the world's top blue-chip protocols (such as Avalon Labs, etc.) to join its ecosystem. This combination of global and local layout strategy has enabled Kaia's global expansion to be solid and rapid.

5. Low valuation of MC/TVL

Compared to TON's higher ratio, KAIA's valuation is significantly undervalued. This low valuation not only reflects the market's conservative judgment on its value positioning, but also hints at KAIA's huge growth potential. Kaia’s capital market value has not yet fully reflected its strong social and payment dividends, especially its strategic significance of being deeply integrated into the user ecosystem in East Asia.

6. Layout for the future: digital infrastructure that reshapes finance and culture

Kaia’s ambition is not limited to the technology itself, but also aims to change the way the entire digital economy operates. Its ecosystem is not just a collection of financial applications, but also reflects Kaia's grand vision of building a future digital society through culture, community and innovative technology. Kaia will continue to work in the field of decentralized finance in the future, combining asset liquidity, on-chain governance and cross-chain interoperability to provide a stable core infrastructure for the global popularization of blockchain technology.

In our opinion, the story of Kaia Chain is not only a narrative of blockchain technology, but also an attempt at social change. It has demonstrated its outstanding ability to promote large-scale application of blockchain through deep cultivation in East Asia, integration of giant resources and bold globalization strategy. In the future, whether Kaia can fulfill its mission of reshaping the global blockchain landscape will become an important benchmark for the development of the blockchain industry.

4. References

1.https://www.kakaocorp.com/ir/referenceRoom/earningsAnnouncement?lang=en

2.https://www.techinasia.com/news/kakao-grows-profit-declining-sales

3.https://medium.com/kaiachain/kaia-d2i-program-report-7193c296db5a

4.https://medium.com/kaiachain/crafting-the-core-of-project-dragons-defi-ecosystem-caa72ec45211

5.https://www.digitalmarketingforasia.com/why-line-is-the-most-popular-social-media-app-in-japan/

6.https://docs.kaia.io/learn/governance/

7.https://usesignhouse.com/blog/line-stats/

8.https://www.aicoin.com/en/article/429056

9.https://www.coindesk.com/web3/2024/11/27/line-with-an-eye-on-telegrams-in-app-games-success-to-launch-mini-DApps-next- year

10.https://cointelegraph.com/press-releases/flareai-the-first-ai-powered-DApp-launching-on-kaia-blockchain

11.https://www.kaia.io/grants

12. https://govforum.kaia.io/t/kgp-26-dragon-defi-initiative-d2i-crafting-the-core-of-project-dragon-s-defi-ecosystem/730/15