Kaia: Joining hands with two major Asian social giants, Line and Kakao, the potential of 250 million users is ready to take off.

1. Background Overview of Kaia

Project Introduction 1.1

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. These two mainnets originate from South Korea and Japan's two major internet giants, Kakao and LINE. On August 29, 2024, the merged Kaia mainnet officially went live. By combining their respective ecosystems and assets, Kakao and LINE 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. Additionally, he was the Chief Technology Officer at GroundX (Kakao's blockchain subsidiary) and served 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 and has a significant impact in Vietnam. LINE is also popular among users in Japan, Taiwan, and Thailand. Together, they provide Kaia with a potential user base of over 250 million, significantly enhancing 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; furthermore, it aims to create the largest and most vibrant Web3 ecosystem in Asia. Other investors in Kaia include Hashed, IDG Capital, and others.

1.1.2 Important Milestones

• January 16, 2024: Klaytn and Finschia announced 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 company has more than 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%. The platform division, which includes Kakao Talk, achieved growth, with revenue increasing by 7% to reach 943.5 billion KRW (707.63 million USD).

Klaytn has been designed from the beginning for DApp developers and enterprises. The ecosystem enables developers to unleash their creativity and enhance user experiences. This provides a strong technological foundation for Kaia. Klaytn's cumulative transaction volume is $376 billion, with over 29 million Web3 wallet users, more than 240k community members, and an ATH Onchain TVL exceeding $1 billion. Additionally, it has a strong influence in Singapore and Vietnam.

The South Korean market has always been crypto-friendly, and its local exchange Upbit has become a leading exchange in the crypto industry. Web3 projects take pride in being able to log in to Upbit. Against the backdrop of the entire Korean population trading cryptocurrencies, the ceiling of Kaia will undoubtedly bring us endless imagination.

1.1.4 Line 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. In Japan, the monthly active users reach 92 million, while in Thailand the user count exceeds 51 million (making it the most popular social platform in Thailand), and Taiwan has 21 million users, with the Indonesian market also boasting 13 million users. This high user penetration rate provides a solid foundation for its advertising, payment, and content services. For example, in the 2024 Nielsen survey on LINE usage behavior, it was found 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, checking LINE an average of 14 times a day for messages.

Compared to other social platforms, LINE's unique ability to integrate ecosystems stands out significantly. Users can consume its rich content products on LINE, including over 300,000 comics and 9 games that integrate social interactions. This diversification of features gives LINE a significant advantage in maintaining user engagement. In addition, the average usage time of over 4 hours per week highlights its irreplaceability in users' daily lives.

This comprehensive ecosystem provides Kaia with a unique strategic advantage. LINE's user base is highly concentrated and active, and the integration of its advertising and payment features allows brands and services to precisely reach their target audience. Furthermore, LINE's regionalization strategy ensures that the platform's content closely aligns with users' cultural needs, creating an efficient pathway 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 USD, LINE Pay has provided its users with a seamless digital payment experience. This payment infrastructure, combined with its highly refined advertising capabilities (with an average monthly reach of over 200 million users), 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 creates a highly compatible development environment through deep integration of its payment, advertising, and communication ecosystems.

The blockchain Finschia, under LINE, was launched as early as 2018. After about 5 years of development, it has over 5.6 million Web 3 wallet users, more than 170k community members, and holds a significant 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 the launch of the SDK for Line mini programs, and the first batch of Line mini program applications will be launched in January 25, while meeting regulatory requirements. As for Kakao, among the 6 council members of Kaia, 3 are from Kakao's blockchain Klaytn. In addition, Kakao and its affiliates hold about 9.8% of Kaia's total supply and are actively involved 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. However, once these regulatory uncertainties are resolved and LINE's mini dApp service succeeds, Kakao is expected to fully embrace blockchain integration.

1.2 Token Economics

1.2.1 Token $Kaia

Kaia's native token KAIA plays a core 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: The platform's customers incentivize the Consensus Nodes (CNs) by paying KAIA, as these nodes are responsible for validating transactions and executing smart contracts. In simple terms, nodes provide computing power and resources, and users pay KAIA as a reward, creating a mutually beneficial relationship.
2. Promote development quality: The fees paid using KAIA are proportional to the complexity and resource consumption of the smart contract. 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 operations 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 Reward, 80% Staking Reward)
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 contributed.
2. The cap 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.

In terms of price, Kaia's performance has also been impressive. Since Klay was renamed to Kaia and went live on a certain trading platform, it has been on the rise.

1.2.2 Governance Council

With the rapid growth of the metaverse driven by technological advancements, decentralized autonomous organizations (DAOs) and developers are becoming important forces in the new economic landscape. Kaia is keeping pace with this trend by launching the Kaia Governance Council (GC), which consists of 31 trusted early members, most of whom are top-tier institutions. These include: Kakao, several well-known trading platforms, cloud service providers, Korea's leading multimedia retailer, a mobile communication operator affiliated with Korea's largest enterprise, Korea's second-largest non-bank financial group, real estate developers with a primary business in Korea, Taiwan, and Southeast Asia, a leading fintech group headquartered in Hong Kong, and a leading startup accelerator under a large Korean online gaming company that specializes in blockchain investments.

Through this choice, the Kaia platform has successfully achieved stable operation of the 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 innovations in governance models.

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," where the voices of all governance entities are unified through on-chain mechanisms. This is not only a technological innovation but also represents a real transformation of governance structures—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. With a governance mechanism that combines foresight and flexibility, Kaia is laying a solid foundation for the sustainable growth of the blockchain ecosystem.