Kaia: The Rise of a New Star in the East Asian Blockchain Ecosystem

1. Background Overview of Kaia

1.1 Project Introduction

1.1.1 Establishment and Development History

On January 16, 2024, the two leading Blockchain platforms Klaytn and Finschia announced the launch of a unified mainnet plan. On August 29, 2024, the merged Kaia mainnet officially went live. Kakao and LINE plan to create a giant Blockchain in Asia and gradually lead the global Web3 market.

Sam Seo, the chairman of the Kaia Foundation, holds a PhD in high-performance computing and has served as CKO at KrustUniverse, where he was responsible for leading the development and operations of Klaytn. Previously, he was the Chief Technology Officer at GroundX and worked as an assistant computer scientist at Argonne National Laboratory.

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

1.1.2 Important Time Nodes

• January 16, 2024: Klaytn and Finschia announced merger plans
• August 29, 2024: Kaia Mainnet officially launched
• September 2024: Kaia Wave Maker Program Launch
• January 2025: The first batch of LINE Mini DApps is scheduled to go live.

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, of which 90% are from South Korea. The company employs over 17k people, and the operating profit for Q3 2024 was 130.5 billion KRW, an increase of 5% year-on-year.

Klaytn has been built for DApp developers and enterprises from the very beginning. Its cumulative transaction volume has reached $376 billion, with over 29 million Web3 wallet users and more than 240k community members. The ATH Onchain TVL exceeds $1 billion and it has a strong influence in Singapore and Vietnam.

1.1.4 Line and Finschia

LINE, as Japan's most popular communication platform, covers 70% of the Japanese population and also dominates markets in Thailand, Taiwan, and other regions. Japan has 92 million monthly active users, Thailand has 51 million, Taiwan has 21 million, and Indonesia has 13 million.

LINE's ecosystem integration capability is outstanding, allowing users to consume a rich array of content products, including over 300,000 comic books and 9 games. The average usage time of over 4 hours per week highlights its irreplaceability.

LINE Pay has 40 million monthly active payment users, with an annual transaction volume exceeding 12 billion USD. The Mini App program will allow existing users to easily access decentralized applications.

Finschia was launched in 2018, has over 5.6 million Web3 wallet users, 170k+ community members, and holds an important position in Japan, Taiwan, Thailand, and Abu Dhabi.

1.2 Token Economics

1.2.1 Token $Kaia

Kaia's native token KAIA plays a central role in the blockchain economy, used for paying transaction fees. It is not only a means of payment for transactions but also powers the normal operation of the system:

1. Incentive mechanism: Users pay KAIA to incentivize consensus nodes.
2. Promote development quality: The fees paid using KAIA are proportional to the complexity of the smart contract.
3. Maintain network health: KAIA rewards incentivize more nodes to participate in the consensus process.

Each new block automatically issues 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%

Kaia implements an on-chain governance system aimed at achieving fairness and inclusivity:

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

1.2.2 Governance Council

The Kaia Governance Council, GC(, is composed of 31 trusted early members, including: Kakao, Binance, Google Cloud, GS HomeShopping, LG Uplus, Hanwha Systems, Everrich Group, HashKey, NEOPLY, and others.

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

Kaia also extends GC membership from traditional enterprises to DAOs and builders. Kaia's ultimate vision is to become a fully decentralized "DAO of DAOs", unifying the voices of all governance entities through on-chain mechanisms.

![With Line and Kakao, two major Asian social giants, 250 million user potential ready to explode, can Kaia replicate the myth of TON?])https://img-cdn.gateio.im/webp-social/moments-b1277c4c9804c4b711bfc616242841a3.webp(

) 1.3 Technical Architecture Principles

Kaia is a highly optimized, BFT-based public Blockchain designed to meet enterprise-level reliability and performance standards.

Kaia Blockchain provides:

1. 1 second Block generation and confirmation time.
2. Can process 4000 transactions per second.
3. Low gas price, 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 enterprises.

The network structure of Kaia is divided into three logical sub-networks:

1. Core Cell Network ###: Composed of core units responsible for transaction verification, execution, and Block creation ( CC ).
2. Endpoint Node Network (: Composed of endpoint nodes ), responsible for processing RPC API requests and servicing chain data.
3. Service Chain Network ( Service Chain Network, SCN ): An auxiliary Blockchain that operates independently by DApps and connects to the main chain through EN.

(# 1.3.1 Consensus Algorithm

Kaia adopts an optimized version of Istanbul BFT. In Kaia, there are three types of nodes: CN) consensus nodes (, PN) proxy nodes ###, and EN( endpoint nodes ).

1. Consensus Node (, CN): Responsible for generating Block, managed by core node operator ( CCO ).
2. Proxy Nodes (, PN): Transmit data between consensus nodes and users. Provide network interfaces, transmit transaction requests, and propagate blocks.
3. Core Unit (CC): composed of one consensus node (CN) and two proxy nodes (PN).
4. Terminal Node ( EN ): Acts as a network endpoint, processing API requests and data handling. Connects users and the network, providing access services.
5. Bootnode (: A special node operated by Kaia, used to help new nodes join the network.

Since validation and consensus are conducted for each Block, forks will not occur, and once consensus is reached, the finality of the Block can be immediately guaranteed.

)# 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 a Block: The goal of each round of operation is to generate a Block within 1 second.
2. Random yet deterministic election process: The election of proposers and committee members is random, but the process is determined by an algorithm, and all nodes can verify this randomness.
3. Two-thirds signature rule: A new Block can only be added to the Blockchain after more than two-thirds of the committee members have signed in agreement.
4. Multi-channel propagation: Blocks and transactions are propagated through independent channels, significantly reducing latency and conflicts.

(# 1.3.3 Kaia Virtual Machine ) KVM ###

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

1. Based on the Ethereum Virtual Machine ###EVM(: Kaia directly inherits the architecture of the Ethereum Virtual Machine, and all Ethereum smart contracts can run seamlessly on Kaia.

2. Extended Functionality: Based on supporting Ethereum opcodes, Kaia has added some specialized precompiled contracts.

3. Compatible Ethereum development tools: Developers can use popular Ethereum development tools such as Remix, Hardhat, and Foundry.

4. Easy Migration: Smart contracts already developed on Ethereum can be deployed to the Kaia platform with minimal modifications.

)# 1.3.4 Security Measures

Kaia has implemented a series of designs to enhance system security:

1. Randomly select a proposer: Use VRF to randomly select the proposer of the Block.

2. Key Separation: Validators use two different keys:

   • Verification Key: Used for participating in Block validation.
   • Reward Key: Used to claim rewards.

3. Transparent verification process: Each member of the committee must verify the new block, and all signature records are public.

(# 1.3.5 Interoperability

One of Kaia's design goals is to achieve seamless interaction with other blockchains, which is specifically reflected in:

1. EVM Compatibility: Kaia supports Ethereum's smart contract language ) Solidity (.

2. Cross-chain capabilities: Kaia can interact with other EVM-SDK based Blockchains. Currently, cross-chain bridges like Butter Network supported by Map Protocol have been integrated into Kaia's cross-chain.

3. Support for multi-chain ecosystem: Not limited to Ethereum, Kaia has also designed mechanisms that can collaborate with other Blockchain systems.

![With Line and Kakao, two major Asian social giants, and the potential of 250 million users ready to take off, can Kaia replicate the myth of TON?])https://img-cdn.gateio.im/webp-social/moments-4a7bd4a686fe367a1b72f1d23f2ce141.webp###

1.4 Competitor

Given that both start from social media, directing traffic from Web2 to Web3, we will focus on comparing Kaia and TON based on Telegram.

The story of TON dates back to 2017, proposed by Telegram founders Pavel Durov and Nikolai Durov. In 2018, Telegram raised $1.7 billion for the TON project through a private placement. However, in 2019, the SEC filed a lawsuit against Telegram, accusing it of issuing the Gram token as an unregistered security. In 2020, Telegram announced its abandonment of the TON project.

Despite Telegram's exit, the open-source community of TON has continued the project.