Kaia Ecosystem Evolution: On-chain Rise Paradigm Centered on Mini Dapp

1. Overview of the Kaia Blockchain Ecosystem

1.1 Background and Team

Kaia is the new ecosystem formed by the merger of Kakao and LINE's two major blockchain projects, Klaytn and Finschia. Klaytn was launched in June 2019 by Ground X, a blockchain subsidiary of Kakao Group, with early governance alliances including well-known South Korean companies such as LG Electronics, Celltrion, and Netmarble. LINE initially launched the LINK chain in August 2018 through its blockchain subsidiary LINE TECH PLUS, and rebranded it to Finschia in 2022. In April 2023, LINE established the Finschia Foundation in Abu Dhabi to operate the Finschia mainnet and its native cryptocurrency asset LINK. In January 2024, the Klaytn Foundation and the Finschia Foundation proposed a mainnet merger to their respective communities to create "the largest Web3 network in Asia." After the proposal was approved, the two chains officially merged at the end of August 2024, launching the brand new Kaia mainnet. The merged Kaia chain is managed by the newly established Kaia DLT Foundation, which fully integrates and inherits the core advantages of Klaytn and Finschia in terms of technical architecture and governance mechanisms.

Kaia aims to be an L1 blockchain focused on large-scale applications, featuring high TPS and developer-friendly properties. Its core advantage lies in its mature SDK system and deep integration with KakaoTalk and LINE platforms, supporting various decentralized applications to run directly on these mainstream social platforms. As a public blockchain based on the BFT consensus mechanism, Kaia has been highly optimized to achieve enterprise-level reliability and performance standards, providing solid underlying support for the next generation of Web3 applications.

1.2 Important Development History

| Time | Event Description | |-------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | June 2019 | Ground X launched the Klaytn mainnet, gathering companies such as LG Electronics and Celltrion to participate in governance. | | December 2022 | LINE launched the Finschia mainnet. | | April 2023 | LINE established the Finschia Foundation in Abu Dhabi to operate the Finschia mainnet. | | August 2024 | Kakao and LINE jointly launch the Kaia mainnet (formed by the merger of Klaytn and Finschia). | | April 2025 | The Kaia Foundation announced that it has secured investments led by 1kx and Blockchain Capital, with participation from Galaxy Digital, The Spartan Group, IDG Capital, Mirana Ventures, SNZ Holding, Comma3 Ventures, Caladan, Lingfeng Capital, Waterdrip Capital, and MEXC Ventures, among others. | | May 2025 | Tether announced the issuance of USDT on the Kaia chain, providing stablecoin services for the LINE ecosystem (approximately 196 million users). |

1.3 Main Features

Kaia adopts a hierarchical node architecture: the base layer consists of multiple "Core Cells," each containing Consensus Nodes (CN) and Proxy Nodes (PN), with Endpoint Nodes (EN) on the periphery. The Kaia mainnet uses an improved Byzantine Fault Tolerance consensus algorithm (Istanbul BFT variant) to ensure efficient consensus. The network achieves a 1-second block time and instant finality, currently having over 50 consensus nodes, with a theoretical peak throughput of about 4000 TPS. During the consensus process, committee members are randomly elected through a Verifiable Random Function (VRF), exchanging consensus information only within the committee, thereby effectively controlling communication overhead and ensuring security as the node scale expands. The Kaia Service Chain provides a highly specialized execution environment: it can facilitate cross-chain token transfers and data anchoring to the main chain, and supports multi-signature bridging contracts to meet enterprise-level security requirements.

Kaia is compatible with EVM and supports smart contracts from the Ethereum ecosystem; at the same time, the platform integrates with various cross-chain bridges (such as StarGate, Orbiter, etc.), allowing assets from Ethereum and other chains to flow seamlessly into Kaia. For example, the ZK technology-based Orbiter cross-chain bridge has been connected to Kaia, enabling secure interoperability between Kaia and Ethereum assets. In addition, Kaia is closely integrated with the LINE instant messaging ecosystem, allowing developers to directly deploy native Dapps within the chat application by providing SDK/API; LINE has 196 million monthly active users, providing a foundation for widespread access to Kaia's ecosystem applications. In May 2025, Tether officially issued native USDT on the Kaia chain, allowing Kaia users to directly use stablecoins for payments and cross-border remittances in their daily chat interface.

Kaia adopts a sustainable token economic model: its native token KAIA is used to pay transaction fees and incentivize network operation. Each time a block is generated, new KAIA is allocated at a fixed ratio: 50% of it is given as rewards to block proposers (10%) and stakers (40%), while the remaining 50% is distributed to the ecosystem fund (25%) and the infrastructure fund (25%). Kaia supports on-chain governance, allowing adjustments to the annual inflation rate and fee model based on community resolutions, thereby balancing token inflation with value incentives. During the merger, the existing tokens of Klaytn and Finschia are converted into KAIA at an agreed ratio, and the initial inventory rebalancing is completed strictly and transparently through smart contracts.

Compared to other mainstream public chains, Kaia has significant differentiated features: it focuses on the Asian market and brings the massive user base of Kakao and LINE into the Web3 ecosystem; technically, it adopts a second-level finality consensus algorithm, providing users with a low-latency, high-throughput experience; ecologically, it rapidly integrates key assets like stablecoins (such as USDT on Kaia). These characteristics (including deep integration with social platforms and product design aimed at ordinary users) give Kaia a unique advantage in promoting the large-scale application of blockchain.

2. Progress of Ecological Construction

In the past year, Kaia has focused on infrastructure construction and ecosystem expansion, continuously promoting the landing of the Mini Dapp ecosystem, the construction of on-chain stablecoin channels, ecological investment, strategic cooperation, and support for developers and the community across multiple dimensions, gradually building a complete closed-loop Web3 ecosystem.

2.1 Kaia Wave plan and Mini Dapp ecosystem

In August 2024, the Kaia mainnet officially launched, along with the release of the Kaia Wave program, marking the start of Kaia's operation as the world's fastest and most efficient EVM-compatible public chain. The design goal of the Kaia mainnet is to achieve around 1-second block time and extremely low Gas fees to meet the massive user demand for on-chain experience. At the same time, the Kaia Wave program is jointly created by Kaia and LINE NEXT, allowing Web3 developers to build Mini Dapps for LINE Messenger users through the NEXT WEB SDK developed by LINE NEXT, leveraging LINE's vast user base in Asian markets such as Japan, Taiwan, Thailand, and Indonesia to accelerate the connection between on-chain projects and end users. This program aims to integrate technology and business resources to bridge global Web3 projects with local ecosystems in Asia, promoting the widespread adoption of Web3 applications.

Under the Kaia Wave program, the first batch of Mini Dapp projects has been launched in LINE Messenger in the first quarter of 2025. These selected projects stood out from approximately 800 team applications and cover multiple niche tracks. Selected teams will have the opportunity to receive support such as development kits (SDK), gas fee sponsorship, joint marketing, and investment opportunities from Kaia Wave.

To further stimulate ecological vitality, Kaia has jointly launched the Mini Dapp Growth Competition with LINE Dapp Portal. The competition focuses on the monthly active users (MAU) of the projects and the rise of on-chain token holders, with incentive mechanisms and exclusive display resources in place, aiming to discover applications with high growth potential. So far, the competition has successfully held two sessions, continuously driving the on-chain Mini Dapp ecosystem of Kaia to accelerate its growth, attracting more and more developer teams to settle in and be active on the Kaia network.

Alongside the launch of Mini Dapp, there is also the Dapp Portal—a Dapp directory and entry point that can be accessed directly through LINE Messenger. The Dapp Portal is designed to allow end users to discover and download various Dapps under the Kaia ecosystem without leaving the familiar LINE environment, enjoy reward mechanisms, and conduct asset transactions. The Dapp Portal will provide users with a one-stop service experience, including Dapp discovery, downloading, usage rewards, and virtual asset trading, thereby lowering the barrier to Web3 services to the minimum. Developers can further expand project exposure and gain more user feedback through the Dapp Portal.

2.2 Kaia Stablecoin Project

The Stablecoin project is one of the core initiatives of the Kaia ecosystem this year, aimed at providing users and developers with a more robust and convenient on-chain financial experience. Following Kaia's rapid accumulation of over 35 million users (as of March 2025) on the LINE and Kakao platforms using the lightweight and easy-to-use Mini Dapp, the ecosystem's popularity continues to rise. To further strengthen the financial infrastructure and provide users with stable value expectations, Kaia has reached a strategic partnership with Tether, the world's largest stablecoin issuer, to natively issue USDT on the Kaia chain in May 2025.

Unlike the USDT transferred through traditional cross-chain bridges, Kaia's USDT is fully deployed in a native contract form on the Kaia network (EVM compatible), directly hosted and issued by Tether, ensuring real-time parity with a "1:1" dollar reserve. This move not only significantly enhances transaction speed and security but also greatly reduces cross-chain fees and operational complexity.

The first batch of native USDT has been integrated into the Mini Dapp ecosystem within LINE Messenger, leveraging LINE's social network advantage with over 196 million monthly active users to facilitate the daily use of stablecoins. Users can directly complete in-app payments, cross-border transfers, and decentralized finance (DeFi) activities within the familiar environment of LINE through Mini Dapp. The main application scenarios include:

• Users can earn USDT rewards by completing tasks in different Mini Dapps, aiding in activity promotion and user retention.

• Users can conveniently send and receive USDT through the built-in wallet in LINE Messenger, achieving an instant and convenient social transfer experience.

• LINE NEXT is considering integrating USDT into more Mini Dapp features to create a closed-loop experience from social to finance.

At the same time, several mainstream exchanges have successively supported the USDT-KAIA network. Currently, Bybit, Bitget, Bitfinex, and Gate all support deposits and withdrawals of USDT-KAIA. These listings provide users with more diversified channels for asset inflow and outflow, further enhancing liquidity and accessibility.

Looking ahead, following the successful launch of the native USDT, the Kaia team is fully committed to promoting the issuance plan of the Korean Won (KRW) stablecoin, and Kaia's "Stablecoin Summer" has just begun. Sam Seo, chairman of Kaia Chain, stated that the former Klaytn team had participated in the CBDC project of the Bank of Korea, laying a solid foundation for the development of stablecoins. In addition, LINE, the operator of the Finschia mainnet, which has now become a key component of the Kaia ecosystem, also participated in the CBDC consulting project of the Bank of Korea, with subsequent simulation testing conducted by Klaytn and its subsidiary Ground X. The collaborative experience of the above-mentioned institutions further enhances Kaia's credibility and professionalism in building a compliant and scalable digital currency infrastructure.

The combination of "Korean won stablecoin + Kaia" will not only inject more liquidity anchored to real assets into the ecosystem but is also expected to accelerate the popularization and implementation of local Web3 applications in South Korea. On this basis, Kaia will also leverage the stability and coverage of USDT to launch a series of impactful on-chain financial products and services, including: tokenization of physical assets, fiat deposit and withdrawal channels, support from major domestic and foreign exchanges, NFT and in-game economic systems, and establish deep cooperative relationships with more DeFi, payment, and consumption scenarios.

By continuously refining the issuance mechanism and application experience of native USDT, the Kaia ecosystem will further enhance user stickiness and cooperation attractiveness, steadily advancing the long-term vision of "everyone can enter Web3, and value can be carried everywhere."

2.3 ecological investment progress

In April 2025, the Kaia Foundation announced that it has secured investments led by 1kx and Blockchain Capital, with participants including Galaxy Digital, The Spartan Group, IDG Capital, Mirana Ventures, SNZ Holding, Comma3 Ventures, Caladan, and Lingfeng Capital.