1. Overview of Kaia's Background

1.1 Project Introduction

1.1.1 Establishment and Development History

On January 16, 2024, Asia's two leading blockchain platforms, Klaytn and Finschia, announced a significant plan: to launch a unified mainnet. The merger of large projects like Klaytn and Finschia is a very unusual project in the Web3 ecosystem, especially considering that these two mainnets originate from 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 Ph.D. in high-performance computing. Previously, Sam served as CKO at KrustUniverse, leading the development and operation of Klaytn. He also held the position of Chief Technology Officer at GroundX (Kakao's blockchain subsidiary) and worked as an assistant computer scientist at Argonne National Laboratory.

The joint support from the two giants, Kakao and LINE, undoubtedly injects strong momentum into Kaia's development. Kakao has a usage rate of 96% in South Korea and has a significant influence in Vietnam. LINE is popular among users in Japan, Taiwan, and Thailand, and combined, Kaia's potential user base exceeds 250 million, significantly enhancing its global reach. With such a large user base, Kaia is expected to greatly increase the adoption and acceptance of blockchain technology in the East Asian market, laying a solid foundation for the large-scale application of blockchain technology; thus creating a large-scale, vibrant Web3 ecosystem in Asia. Other investors in Kaia include Hashed, IDG Capital, and others.

1.1.2 Important Milestones

Next, let's take a closer look at Kakao and LINE.

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 over 17,000 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, including Kakao Talk, achieved growth, with revenue increasing by 7% to 943.5 billion KRW (707.63 million USD).

Klaytn was designed from the beginning for DApp developers and enterprises. This ecosystem allows developers to unleash their creativity and enhance user experience. This provides a strong technical 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, in addition to a strong influence in Singapore and Vietnam.

The South Korean market is already crypto-friendly, with the local exchange Upbit becoming a leading exchange in the crypto industry, and Web3 projects take pride in being listed on Upbit. Against the backdrop of widespread cryptocurrency trading among South Korean users, the ceiling for Kaia undoubtedly brings us endless imagination.

1.1.4 LINE and Finschia

As Japan's most popular communication platform, LINE covers 70% of the Japanese population and also dominates markets in Thailand, Taiwan, and others. In Japan, the monthly active users reach 92 million, while the user count in Thailand exceeds 51 million (making it the most popular social platform in Thailand), and Taiwan has 21 million users, with Indonesia having 13 million users. This high user penetration provides a solid foundation for its advertising, payment, and content services. For example, a 2024 Nielsen survey on LINE usage behavior found that 92.1% of Taiwanese people aged 15-65 used LINE in the past week, with nearly half being heavy users, checking LINE an average of 14 times a day.

Compared to other social platforms, LINE's unique ability to integrate ecosystems stands out. Users can consume its rich content products on LINE, including over 300,000 comic books and nine games that integrate social interaction. This diversification gives LINE a significant advantage in maintaining user engagement. Additionally, the average usage time of over four 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 functions allows brands and services to precisely reach target audiences. Furthermore, LINE's localized strategy ensures that its platform content closely matches users' cultural needs, creating an efficient path for Kaia's localized promotion.

LINE's payment ecosystem also demonstrates 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 its users with a seamless digital payment experience. This payment infrastructure, combined with its highly refined advertising capabilities (reaching over 200 million users monthly), offers a natural advantage for blockchain projects to land and expand in the Asia-Pacific market.

Notably, the LINE Miniapp plan serves as 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 through deep integration of its payment, advertising, and communication ecosystems.

LINE's blockchain Finschia was launched as early as 2018, and after about five years of development, it has over 5.6 million Web3 wallet users, more than 170k community members, and holds significant positions 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 promoter 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 and will release the first batch of LINE mini-program applications in January 2025, while meeting regulatory requirements. On the Kakao side, among the six council members of Kaia, three come from Kakao's blockchain Klaytn. Additionally, 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 plans, 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 serves not only as a means of payment for transactions but also powers the normal operation of the entire system:

1. Incentive Mechanism: Platform customers incentivize Consensus Nodes (CNs) by paying KAIA, as these nodes are responsible for verifying 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. Promoting Development Quality: The fees paid in KAIA are proportional to the complexity and resource consumption of the smart contracts. 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 computing resources.
3. Maintaining Network Health: CN nodes receive KAIA rewards for consuming computing power and bandwidth to support network operations, which can incentivize more nodes to participate in the consensus process, 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 distribution of block rewards 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 incentivizes network participation while supporting 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 staked.
2. A cap on voting rights prevents the opinions of a minority from being suppressed.
3. Delegation of voting rights is allowed.
4. All governance proposals are recorded on-chain to ensure transparency.

In terms of token price, Kaia has also performed impressively. Since Klay changed its name to Kaia and was listed on Binance, it has been on an upward trend.

1.2.2 Governance Council

With technological advancements driving the rapid growth of 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 institutions. These include: Kakao, Binance, 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 operating in South Korea, Taiwan, and Southeast Asia), HashKey (a leading fintech group based 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 selection, 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 governance model innovations.

Moreover, Kaia has expanded GC membership from traditional enterprises to include 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 represents not only a technological innovation but also a true transformation of governance structures—empowering all stakeholders with 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 forward-looking and flexible governance mechanism, Kaia is laying a solid foundation for the sustainable growth of the blockchain ecosystem.

In addition, Kaia is closely collaborating with government departments; for example, the Bank of Korea has chosen its parent company Ground X as the primary 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.

The Kaia blockchain offers:

1. 1-second block generation and confirmation time.
2. Capable of processing 4,000 transactions per second.
3. Low gas fees, approximately 1/10 of Ethereum's.
4. EVM compatible, supporting Solidity contracts.
5. Governed by the Kaia Governance Council, composed of globally recognized enterprises.

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 handling RPC API requests and service chain data.
3. Service Chain Network (SCN): Composed of auxiliary blockchains that run DApps independently, 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 applications 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 system reliability and attack resistance through multiple security measures. This is specifically reflected in the following five aspects.

1.3.1 Consensus Algorithm

The consensus algorithm is a mechanism used to reach agreement among a group of mutually distrustful participants. Its core goal is to determine which blocks are "valid" in the 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 crucial role in the user experience of blockchain applications. For example, the more efficient the consensus algorithm, the faster the blockchain can process transactions.

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 the problem of forks. However, PBFT also has limitations; as the number of participating nodes increases, the communication volume between nodes grows exponentially, making PBFT suitable for networks with a limited number of nodes.

To address the communication bottleneck of PBFT while achieving high performance, 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 blocks, managed by Core Node Operators (CCO).
2. Proxy Nodes (PN): Relay data between consensus nodes and users. They provide network interfaces, transmit transaction requests, and propagate blocks.
3. Core Cell (CC): Composed of one consensus node (CN) and two proxy nodes (PN).
4. Endpoint Node (EN): Acts as a network endpoint, handling API requests and data processing. It connects users to the network and provides access services.
5. Bootnode: A special node operated by Kaia to help new nodes join the network.

Since validation and consensus are performed for each block, there will be no forks, and once consensus is reached, the finality of the block can be immediately guaranteed.

Additionally, the problem of increased communication volume in the BFT algorithm is also addressed by utilizing a randomly selected committee. CNs collectively form a committee, and during each block generation, a portion of them is selected as committee members using VRF (Verifiable Random Function). The main process is:

1. Randomly select a committee: A mathematical method (called VRF, Verifiable Random Function) is used to fairly and randomly select a group of people responsible for generating and validating blocks. This group is called the "committee," which includes "proposers" (responsible for proposing new blocks) and "validators" (responsible for checking the compliance of blocks). The role of VRF is to ensure the fairness of the election while making the entire process verifiable but unpredictable, making it difficult for malicious nodes to attack.
2. Generate a block: The selected proposer generates a new block, which contains the transaction data to be processed.
3. Validation and signing: Validators in 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 will be added to the blockchain.

Since consensus information is only exchanged among committee members, the communication volume will not exceed the designed 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 yet efficient, ensuring the stability and scalability of the system. Specific features include:

1. Rapid block generation: The goal of each round of operations is to generate a block within 1 second, which is considered a highly efficient design in the blockchain field.
2. Random yet deterministic election process: Although the election of proposers and committee members is random, the process is determined by algorithms, and all nodes can verify this randomness. This design increases security while ensuring fairness.
3. Two-thirds signature rule: A new block can only be added to the blockchain if it is signed by more than two-thirds of the committee members. This mechanism ensures the credibility and immutability of the block.
4. Multichannel propagation: To avoid network congestion, Kaia adopts a method of independent propagation for blocks and transactions, similar to transmitting different information on different lanes. Blocks and transactions are propagated through independent channels, significantly reducing delays and conflicts.

1.3.3 Kaia Virtual Machine (KVM)

The Kaia Virtual Machine (KVM) is the core component for running smart contracts, designed with compatibility and scalability in mind, with the following main features:

1. Based on the Ethereum Virtual Machine (EVM):

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

2. Extended functionality:

In addition to supporting Ethereum opcodes (smart contract execution instructions), Kaia has added some specialized precompiled contracts. These contracts are optimized code modules that can enhance the efficiency of specific operations.

3. Compatibility with Ethereum development tools:

Developers can use popular Ethereum development tools like Remix, Hardhat, and Foundry with minimal need to learn new tools.

4. Easy migration:

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

This makes Kaia an extension of the Ethereum ecosystem, better positioned to capture a large number of EVM-based developers.

1.3.4 Security Measures

The Kaia Virtual Machine (KVM) is the core component for running smart contracts, designed with compatibility and scalability in mind. Key features include:

To enhance system security, Kaia has implemented a series of designs:

1. Randomly selecting proposers:

Using VRF (Verifiable Random Function) to randomly select the proposer of a block. This makes it impossible for attackers to predict who will be the proposer in the next round, thereby increasing security.

2. Key separation:

Validators use two different keys:

• Verification key: Used for participating in block validation.
• Reward key: Used for receiving rewards.

This design effectively prevents hackers from gaining both validation authority and rewards after attacking a single key.

3. Transparent validation process:

Each member of the committee must validate the new block, and all signature records are public, allowing anyone to check the validation results.

These measures ensure that the Kaia system remains secure and stable 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 reflected in:

1. EVM compatibility: Kaia supports Ethereum's smart contract language (Solidity), allowing developers to easily migrate applications from Ethereum to Kaia.

2. Cross-chain capabilities: Kaia can interact with other EVM-SDK based blockchains, enabling cross-platform transactions and smart contract executions. Currently, cross-chain bridges like Butter Network supported by Map Protocol have already integrated with Kaia.

3. Support for multi-chain ecosystems: Kaia is not limited to Ethereum; it has also designed mechanisms to collaborate with other blockchain systems.

This makes Kaia a flexible blockchain platform capable of meeting various cross-chain scenario needs, such as asset cross-chain transfers for decentralized exchanges (DEXs) and cross-chain smart contract calls.

1.4 Competitors

Given that both start from social media and transition from Web2 to Web3, we will focus on comparing Kaia with the Telegram-based TON.

With over 900 million users, Telegram offers games including Catizen and Hamster Kombat through the Open Network (TON) blockchain, pioneering the transmission of Web3 through social media.

The story of TON dates back to 2017, proposed by Telegram founders Pavel Durov and Nikolai Durov. The project's original intention was to deeply integrate blockchain technology with Telegram's social ecosystem to create an ideal platform for decentralized applications (DApps) while meeting the demands for fast 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 unregistered securities in the form of Gram tokens. This legal turmoil ultimately led Telegram to announce the abandonment of the TON project in 2020.

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

TON's design centers on high performance and strong scalability, utilizing sharding technology and a Proof-of-Stake (PoS) consensus mechanism to support large-scale parallel transaction processing. Additionally, TON offers a range of innovative features, including:

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

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

As of 2024, TON has attracted over 800 applications, including stablecoin solutions, NFT platforms, and decentralized finance (DeFi) applications. Particularly in the stablecoin sector, the on-chain USDT supply has rapidly increased, injecting strong liquidity into its ecosystem. Notable examples include:

• Tap to Earn mini-games: Representative chain games on the TON chain, such as Notcoin and Hamster Kombat, have attracted a large number of users, with daily active users exceeding 5 million at one point. These games feature "low learning costs and high accessibility," making them very suitable for fragmented time play, thus having strong appeal within the TON chain ecosystem.
• Decentralized finance (DeFi): The total value locked (TVL) on the TON chain has seen significant growth, currently surpassing $600 million, making it one of the main competitors in the DeFi space.
• NFT and SocialFi applications: Based on Telegram's traffic entry, the TON chain has integrated Web3 concepts into the social domain through applications like NFT and SocialFi, forming an ecosystem of applications that combine entertainment and interactivity.

Moreover, TON has successfully attracted a large number of developers and decentralized enthusiasts due to its global community foundation and good technical performance.

However, TON has also faced challenges, such as brief infrastructure interruptions during periods of high network activity. This reflects the need for further optimization in the project's development potential and technical stability. The main comparisons are as follows:

1.5 Preliminary Value Assessment

Although TON still holds global influence in decentralization and technological innovation, KAIA's localized strategy and strong user base give 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 widespread adoption of Web3 applications in the future.

We compared the following indicators. Among them, from the MC/TVL metric, KAIA's current valuation is significantly lower than that of TON, suggesting that its market positioning and localization strategy have not been fully quantified, and the potential of the capital market has not been completely tapped, especially as the social and payment dividends released by its large user ecosystem relying on LINE and KakaoTalk have not yet fully translated into capital market value. In contrast, TON's MC/TVL ratio indicates a high recognition of its technological capabilities and global expansion vision, but a high valuation may imply that its growth space is gradually narrowing.

Additionally, KAIA's current valuation may not fully reflect its strategic significance in the implementation of Web3 applications. For example, by deeply integrating with existing social payment systems, KAIA has achieved a seamless connection between innovative scenarios like DeFi and NFTs and users' daily behaviors, providing natural stickiness and vitality for its ecosystem development.

However, whether this potential can truly be realized still requires waiting for specific application scenarios to materialize. In particular, the LINE mini app planned for Q1 2025, as an important step for KAIA to expand its Web3 influence, will become a crucial opportunity to test its ecological value. This milestone not only relates 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

2.1 DeFi 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 impact of economic activities by providing services like capital lending, becoming a catalyst for economic development.

However, the development path of the blockchain world is entirely different from that of the real world. Leading blockchain networks such as Ethereum, Arbitrum, Optimism, BNB, and Solana first built DeFi ecosystems with financial infrastructure before gradually promoting the landing of DApps (decentralized applications) in other industries. Through functions like capital lending, token swapping, and reward mechanism design, DeFi provides the necessary liquidity support for various DApps, enabling them to establish a foundation on-chain. In other words, in the blockchain world, the financial infrastructure of the network becomes a prerequisite and an indispensable foundation for the accumulation of digital products and ecosystem development.

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

During the DeFi summer of 2021, Kaia attracted a large amount of capital through liquidity mining. However, the collapse of the on-chain economic bubble in 2022 led to a significant shrinkage of the ecosystem, and Kaia's competitiveness was also affected to some extent. The D2I program aims to quickly revitalize this underutilized ecosystem through incentive measures and provide financial infrastructure support for new DApps after chain merging. In the long run, the core goal of this program is to comprehensively reshape Kaia's DeFi ecosystem and assist in its resurgence.

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 continue to maintain an active pace of development. As of now, these teams have achieved the following results:

• Cumulative trading volume: over $710 million;
• Total value locked (TVL): over $39 million;
• Number of transactions: completed over 3.1 million;
• User growth: over 260,000 cumulative users;
• Ecological contribution: burned 245,000 KAIA.

It is noteworthy that the on-chain DEX's $KAIA trading volume has already matched 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, bring in another DEX main team capable of handling institutional liquidity. The DeFi ecosystem is continuously evolving, transitioning from complex "funding blocks" (such as yield aggregators and leveraged liquidity mining) to derivatives based on ecological native tokens and stablecoins. This change aligns with the growing institutional demand. As the core financial infrastructure (spot DEX and money markets) gradually stabilizes, Kaia will focus on developing derivatives based on native coins and stablecoins (such as LSDfi, LRTfi, and yield stripping derivatives). Its primary goal is to increase the market share of LSD and LRT, allowing Kaia's native coin to play a more active role in the DeFi ecosystem.

The D2I program demonstrates Kaia's strategic foresight in revitalizing the DeFi market. Through precise incentive mechanisms and strong ecological partnerships, Kaia not only addresses current core issues but also lays a solid foundation for future development. As the core financial infrastructure and derivatives market gradually improve, Kaia is expected to stand out in the increasingly competitive blockchain landscape, becoming a trusted DeFi solution provider for enterprises and users.

In the future, the builders of D2I will evolve from simple DEX platforms to comprehensive platforms. They are also continuously adding new features, such as Launchpads, Meme platforms, liquidity management, lotteries, and perpetual futures. These powerful infrastructures now allow all DApps in the Kaia ecosystem — including the upcoming Mini DApp on Line — to easily establish an on-chain ecosystem through these features.

2.1.1 Neopin

Project Overview: NEOPIN was established in 2021 and is a "licensed DeFi protocol" under South Korean gaming giant Neowiz, combining the advantages of both CeFi and DeFi. It is the first DeFi in the Kaia ecosystem, dedicated to bridging traditional finance and DeFi protocols within a compliant framework. NEOPIN has been selected for the innovation program of the Abu Dhabi Investment Office and is collaborating with local government agencies to develop a DeFi regulatory framework, making it a rare licensed DeFi service provider that actively embraces regulation to ensure long-term development. The current TVL has reached $240 million, supporting 59 tokens and having 22 nodes.

X: @NeopinOfficial

2.1.2 Lair Finance

Project Overview: Lair Finance is a liquidity staking protocol on Kaia, aimed at providing users with decentralized finance (DeFi) yield opportunities. Through its unique token economic model and staking mechanism, users can participate in liquidity provision and asset appreciation plans on the platform, earning more KAIA token rewards and achieving sustainable financial returns.

X: @LairFinance

2.1.3 CapybaraExchange

Project Overview: The first and largest DEX on the Kaia chain. It features ultra-high capital efficiency, transparency, and community-first principles. Its TVL has significantly increased in the past two months, exceeding $40 million.

X: @CapybaraDEX

2.1.4 Avalon Labs

Project Overview: Avalon Labs (formerly Avalon Finance) is a leading lending ecosystem centered around Bitcoin, uniquely positioned at the intersection of DeFi, CeDeFi, and RWA (real-world assets) lending. By connecting these three key areas, Avalon Labs has become a cornerstone of the rapidly evolving decentralized finance space. Avalon Labs chose to build its products on the Kaia chain, a decision based on the high alignment of core values between the two. Kaia focuses on community-driven, sustainable development, and simplifying user experience, which aligns with Avalon’s vision in the decentralized finance (DeFi) field. Avalon Labs can bring its existing active user base of 80,000 to 90,000 and significant total locked value (TVL) to the Kaia chain. This initiative will extend the influence of the Kaia chain beyond the Asia-Pacific region and into multiple global niche markets, thereby expanding its impact in the international blockchain ecosystem.

X: @avalonfinance_

2.1.5 DragonSwap

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

X: @dragonswap_dex

2.2 Payment Track

2.2.1 Alchemy Pay

Project Overview: Alchemy Pay was founded in 2018 in Singapore and is a payment gateway that seamlessly connects cryptocurrencies and global fiat currencies for businesses, developers, and users. The Alchemy Pay Ramp solution can be integrated 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, Diner's Club, Google Pay, Apple Pay, popular regional mobile wallets, and domestic transfers, with a focus on emerging markets. It can also remit to users in over 50 local fiat currencies. Recently, Kaia partnered with Alchemy Pay to provide zero-fee $KAIA bridging services, allowing users to seamlessly purchase $KAIA using local fiat currencies through bank cards or mobile wallets, enjoying ultimate convenience.

X: @AlchemyPay

2.3 AI Track

2.3.1 FlareAI

Project Overview: FlareAI is the first AI-driven DApp launched on the Kaia blockchain. This marks the integration of cutting-edge AI technology with Kaia's robust blockchain infrastructure, setting a new standard for innovation in decentralized ecosystems. FlareAI aims to revolutionize the integration of AI and blockchain technology, addressing key challenges in AI 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 facial recognition network that utilizes the incentive characteristics of Web3 to better acquire facial data, thereby creating value in scenarios such as AIGC generating 3D character images and advertising marketing. At the same time, it uses blockchain technology to protect user data privacy. FDN has entered the first phase of the Kaia Wave project and is part of the acceleration programs of Web3Labs and Kucoin.

X: @project_fdn

2.4 MINI DAPPS on LINE

In the Web3 Game universe of 2024, Ton, in collaboration with Telegram, has led a new business model with a host of Mini Apps. Leveraging Telegram's astonishing user base of 900 million, Web3 Games have gained an unprecedented number of users and interactions. Recently, LINE also announced the first batch of Mini Dapp launch lists, which we will introduce as follows:

1. Bombie: A meme mini-game released by Pluto Studio where players shoot zombies to earn airdrop rewards. In just three months since its release, it has gained 7 million game users and generated $10 million in game revenue. Bombie is the world's first mini-game that spans both Telegram and LINE, and it is set to launch on the LINE Dapp Portal in January 2025, allowing users to directly access, play, and accumulate user rewards through LINE Messenger.

X: @Bombie_xyz

2. Bullet Storm: An innovative arcade shooting game that combines social participation and reward-driven gameplay, attracting millions of players worldwide.

X: @_KultGames

3. Captain Tsubasa (Minttown): A mini-game developed by software company MintTown, based on the legendary Japanese soccer anime IP "Captain Tsubasa."

X: @TsubasaRVonTG

4. Contentverse (Wizzwood): A team that first integrates Web2 social platforms with Web3 games. Wizzwoods is a pixel-style farming idle 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, with its mobile game officially launched on Telegram on September 23. W3Forge is the studio behind zkRace (165x ATH), which ranked in the top 20 of global IDOs in 2021 as selected by CoinMarketCap, and was in the top 5 on the DAO Maker launchpad.

X: @Elderglade

6. Frog Defense: A mini-game called Frog Defense. Making its debut on the Kaia blockchain and LINE, it brings the popular TikTok game Frog Pikeman, which has 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 memes, creating an exciting entry point for millions of users to explore the potential rewards of blockchain gaming.

X: @FrogDefense

7. Futr: A prediction market platform where real-world outcomes meet social connections. Futr is designed for collaboration, allowing users to predict events, earn rewards for accurate insights through Futr tokens, and engage 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: Developed by a community startup studio, it cultivates unique digital companions on the Kaia blockchain.

X: @dokyoworld

9. Goblin Master: Goblin Master enables brands to create their own immersive digital realms, attracting audiences through engaging gameplay and unique reward experiences. It has crafted a game world filled with magical quests and imagination.

X: @GoblinMasterTon

10. Goblin Tycoon: Exclusively developed by Digital Fire Studios for LINE Messenger, it is an idle casual game where players can develop a goblin empire, acquire powerful weapons, upgrade resources, and battle epic bosses in a fun and addictive adventure.

X: @GoblinTycoonZoH

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

X: @heroicarenagame

12. KeitoKun: KeitoKun is a one-stop entertainment application platform on Kaia and LINE. KeitoKun places a high value on community-driven growth and decentralized innovation, transforming entertainment into an immersive and rewarding journey for users. It will launch on Kaia and LINE in January 2025.

X: @KeitoKunyarn

13. Midnight Survivors: The first gacha roguelike game on LINE supported by KaiaChain, it combines intense survival gameplay with a rewarding gacha system, exclusive in-app rewards, and opportunities for players to earn through its innovative gaming airdrop experience.

X: @Survivors_gg

14. Shin Chan's Match Daily: Dive into a quirky world that blends match-three puzzles with find-the-difference challenges, featuring the iconic Crayon Shin-chan universe. Developed by a subsidiary of GGI, a global leader in blockchain game publishing and content community.

X: @MIXMARVELGAME

15. SuperWalk: A healthcare and wellness portal Dapp aimed at non-crypto users, seamlessly integrating fitness habits with tangible rewards, boasting over 300,000 users.

X: @SuperWalk_

16. Web3.0 Plants vs Zombies: Web3 Plants vs Zombies combines innovative merging upgrade mechanics with classic tower defense gameplay. Players collect and deploy powerful cards to build strategic defenses, battling wave after wave of enemies, ultimately facing off against epic bosses. The game features dynamic progression, challenging levels, and vibrant visuals, providing a captivating experience that redefines tower defense for modern gamers.

X: @TelgatherGames

17. TCOM (Astroboy): TcomArena is a top-tier action-adventure game that blends classic action RPG elements with innovative gameplay. Players will take on the role of the legendary character Astro Boy and the Three-Eyed One, embarking on an exhilarating adventure. By defeating hordes of enemies, unlocking powerful skills, and upgrading attributes, players will grow through continuous challenges, dedicated to creating the world's largest Web3.0 IP open platform.

X: @ACGWORLDS

18. Twelve Goblins: A merging puzzle game from the Web3 project "Wizardry BC Project," which utilizes Drecom's IP "Wizardry."

X: @TwelveGoblins

19. X-Hero: X-Hero, developed by Digital Fire Studios, is a variant of tower defense games where players can summon heroes, devise defense strategies, and battle relentless waves of monsters in dynamic and addictive gameplay.

X: @DigitalfireStu

20. Yuliverse: Yuliverse is a gamified social metadata platform that transforms users' lifestyles into crypto assets using location-based service technology.

X: @TheYuliverse

2.5 Other Ecological Activities

2.5.1 Kaia Wave

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

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

The following image shows the excitement of the Wave event held in Thailand in November.

2.5.2 Line Next

Kaia also frequently co-hosts various offline events with LINE NEXT, such as the recently held Kaia Demo Day project showcase and Creator Alliance Assemble. LINE NEXT is a dedicated Web3 enterprise under LINE, focusing on NFT business, which received up to $140 million in investment in 2023 from private equity fund operator Crescendo Equity Partners and its consortium.

2.5.3 Kaia Grants

Kaia has launched multiple projects to provide a range of generous support and professional assistance to DApps. Here are some projects that have received Kaia Grants, including some well-known projects like LayerZero, OpenSea, ELYSIA, and more.

Kaia Ecosystem Fund

The KEF focuses on ecological construction, covering service rewards, developer community cultivation, infrastructure support, indirect investments, and the operation of the governance committee, funded by 25% of the total KAIA issued at the time of block creation. Its operations are transparent, with all budget and usage details requiring approval and public disclosure by the governance committee.

Kaia Infrastructure Fund

The KIF focuses on supporting mainnet and infrastructure R&D, ecological acceleration (providing funding support for small Kaia blockchain ecosystem partners, attracting new GC members, and providing market liquidity), and foundation operations, also supported by 25% of newly added KAIA, ensuring efficient and transparent execution of funds through strict internal control mechanisms.

Ignite on Kaia

This program aims to help achieve seamless onboarding for DApp developers by providing practical market support in technical and business aspects. The IOK program allows DApp developers to focus on product development while industry experts handle other important aspects such as wallets, marketing, security tools, API nodes, NFT markets, Oracles, and development outsourcing. In this program, especially for "Go-To-Market," the IOK fund can help projects cover part of their marketing expenses.

3. Highlights Summary

In the global Web3 ecosystem landscape, KAIA is like a rising star, starting from the East Asian market and gradually building a regionally advantageous blockchain solution through precise positioning, technological innovation, and ecological integration. From the above summary, we mainly have the following points:

1. Unique positioning: Giants join forces to build the cornerstone of the East Asian blockchain ecosystem.

Kaia Chain is born from the collaborative support of two tech giants—Kakao and LINE—making it one of the most ambitious blockchain projects in the East Asian market. This partnership not only provides technical resources and capital backing but also brings Kaia an unparalleled user potential. With a combined user base of over 250 million, Kaia has a unique growth soil. This deep user foundation allows KAIA to naturally integrate blockchain services into familiar social payment scenarios, creating a localized Web3 ecological experience. For users accustomed to Asian social culture, KAIA is not a foreign technology platform but an organic extension of their daily lives.

2. Asset Scale and Ecological Breadth: The Largest Web3 Network in Asia

Kaia Chain unifies the Klaytn and Finschia networks, with an asset scale exceeding $75 billion, making it an unmatched giant in the blockchain field in Asia. More importantly, Kaia has built a rich ecosystem covering over 360 DApps, encompassing various fields such as decentralized finance (DeFi), NFTs, gaming, and social applications. This not only makes Kaia one of the largest Web3 ecosystems in East Asia but also showcases its ability and diverse potential to build applications across multiple industries.

3. Large-scale Introduction of Existing Web2 Users: A Gateway Connecting Web and Web3

In addition to building a technologically advanced blockchain network, Kaia has created a low-threshold Web3 entry for users through innovative products like LINE MiniApp. The introduction of the "Kaia Wave" program significantly lowers the entry barrier for users. This program invests $10 million to support developers and attract a large number of 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 "one-click user experiences," making Web3 truly integrate into mainstream society.

4. Global Vision and Ecological Collaboration: From East Asia to the World

Kaia fully leverages Kakao and LINE's strong positions in the Asian market and extends its influence globally, especially in the Middle East. Its headquarters is located in Abu Dhabi, strategically positioned to connect the Asian, Middle Eastern, and Western markets. At the same time, Kaia actively collaborates with leading international DeFi projects and attracts top global blue-chip protocols (such as Avalon Labs) to join its ecosystem. This combination of global and local strategies ensures that Kaia's global expansion is solid and rapid.

5. Underestimation of MC/TVL

Compared to TON's higher ratios, KAIA's valuation is significantly low. This undervaluation not only reflects the market's conservative judgment of its value positioning but also hints at KAIA's enormous growth potential. Kaia's capital market value has yet to fully reflect its strong social and payment dividends, especially the strategic significance of its deep integration into the user ecosystem in East Asia.

6. Future Layout: Reshaping the Digital Infrastructure of Finance and Culture

Kaia's ambitions extend beyond technology itself; it aims to change the way the entire digital economy operates. Its ecosystem is not just a collection of financial applications but embodies Kaia's grand vision of building the future digital society through culture, community, and innovative technology. In the future, Kaia will continue to focus on the decentralized finance sector, combining asset liquidity, on-chain governance, and cross-chain interoperability to provide a stable core infrastructure for the global adoption of blockchain technology.

In our view, the story of Kaia Chain is not just a narrative of blockchain technology but an attempt at social transformation. By deeply cultivating East Asia, integrating giant resources, and implementing bold globalization strategies, it demonstrates an exceptional ability to drive the large-scale application of blockchain. In the future, whether Kaia can fulfill its mission of reshaping the global blockchain landscape will become an important barometer 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

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