"South Korea Ethereum" Kaia Ecosystem Evolution: On-chain Growth Paradigm Centered Around Mini Dapps

1. Overview of the Kaia Blockchain Ecosystem

1.1 Background and Team

Kaia is the new ecosystem formed by the merger of the two major blockchain projects Klaytn and Finschia, led by Kakao and LINE. Klaytn was launched in June 2019 by Ground X, the 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 through its blockchain subsidiary LINE TECH PLUS in August 2018 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 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." By the end of August 2024, the two chains officially merged, launching the new Kaia mainnet. The merged Kaia chain is managed by the newly established Kaia DLT Foundation, which integrates and inherits the core advantages of Klaytn and Finschia in terms of technological architecture and governance mechanisms.

Kaia aims to be an L1 blockchain focused on large-scale applications, featuring high TPS and developer-friendly characteristics. 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 Progress

| Time | Event Description | |-------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | June 2019 | Ground X launched the Klaytn mainnet, gathering companies like 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 | Kaia Foundation announced that it has secured funding led by 1kx and Blockchain Capital, with participants including Galaxy Digital, The Spartan Group, IDG Capital, Mirana Ventures, SNZ Holding, Comma3 Ventures, Caladan, Lingfeng Capital, Waterdrip Capital, and MEXC Ventures. | May 2025 | Tether announced the issuance of USDT on the Kaia blockchain, providing stablecoin services for the LINE ecosystem (approximately 196 million users). |

1.3 Main Features

Kaia adopts a layered 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 employs 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 possessing over 50 Consensus Nodes, with a theoretical peak throughput of approximately 4000 TPS. During the consensus process, committee members are randomly elected through a Verifiable Random Function (VRF), and consensus information is exchanged only within the committee, effectively controlling communication overhead and ensuring security as the scale of nodes expands. The Kaia Service Chain provides a highly specialized execution environment: it enables 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 EVM compatible and supports smart contracts in the Ethereum ecosystem; at the same time, the platform integrates with various cross-chain bridges (such as StarGate, Orbiter, etc.), enabling assets from Ethereum and other chains to flow seamlessly into Kaia. For example, the ZK technology-based Orbiter cross-chain bridge has been connected with Kaia, achieving 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 the wide access of Kaia ecosystem applications. In May 2025, Tether, the world's largest stablecoin issuer, officially issued native USDT on the Kaia chain, allowing Kaia users to directly use stablecoins for payments and cross-border transfers within 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 distributed according to a fixed ratio: 50% is allocated as rewards for block proposers (10%) and stakers (40%), while the remaining 50% goes into the ecosystem fund (25%) and infrastructure fund (25%). Kaia supports on-chain governance, allowing the annual inflation rate and fee structure to be adjusted according to community resolutions, thereby balancing token inflation and 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 transparently and strictly through smart contracts.

Compared to other mainstream public chains, Kaia has significant differentiating features: it focuses on the Asian market, bringing massive users from Kakao and LINE into the Web3 ecosystem; technologically, it adopts a second-level finality consensus algorithm, providing users with low latency and high throughput experience; ecologically, it quickly integrates key assets like stablecoins (such as USDT on Kaia). These characteristics (including deep social platform integration 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 advancing around multiple dimensions such as the landing of the Mini Dapp ecosystem, on-chain stablecoin channel construction, ecological investment, strategic cooperation, and support for developers and the community, 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 simultaneous release of the Kaia Wave program, marking the beginning of Kaia's operation as the fastest and most efficient EVM-compatible public chain in the world. The design goal of the Kaia mainnet is to achieve approximately 1 second block time and extremely low Gas fees to meet the demands of a massive user base for on-chain experiences. At the same time, the Kaia Wave program is jointly developed by Kaia and LINE NEXT, utilizing the NEXT WEB SDK developed by LINE NEXT to enable Web3 developers to build Mini Dapps for LINE Messenger users. Leveraging LINE's vast user base in Asian markets such as Japan, Taiwan, Thailand, and Indonesia, the program aims to accelerate the connection between on-chain projects and end-users. This initiative seeks to build bridges between global Web3 projects and local ecosystems in Asia through the integration of technological and business resources, 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. The selected teams will have the opportunity to receive support such as development kits (SDK), gas fee reimbursement, joint marketing, and investment opportunities from Kaia Wave.

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

Also launched alongside Mini Dapp is the Dapp Portal—a Dapp directory and entrance that can be accessed directly through LINE Messenger. The Dapp Portal aims to allow end users to discover and download various Dapps under the Kaia ecosystem without leaving the familiar LINE environment, enjoying the reward mechanisms and trading assets within. The Dapp Portal will provide users with a one-stop service experience, including Dapp discovery, download, usage rewards, and virtual asset trading, minimizing the threshold for Web3 services. Developers can further expand project exposure and gain more user feedback through the Dapp Portal.

2.2 Kaia Stablecoin plan

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

Unlike traditional USDT transferred through cross-chain bridges, Kaia's USDT is fully deployed on the Kaia network (EVM compatible) in the form of a native contract, directly managed and issued by Tether, ensuring real-time parity with "1:1" dollar reserves. This move not only significantly enhances transaction speed and security but also greatly reduces cross-chain costs 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 achieve the daily use of stablecoins. Users can directly complete in-app payments, cross-border transfers, and decentralized finance (DeFi) activities in the familiar environment of LINE through the 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 of 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.

Meanwhile, multiple mainstream exchanges have successively supported the USDT-KAIA network: Bitget has currently fully opened the deposit and withdrawal functions for the USDT--KAIA network, and Bitfinex has also launched the USDT channel for the Kaia network. Currently, Bybit, Bitget, Bitfinex, and Gate have all supported the deposit and withdrawal of USDT--KAIA. These launches provide users with more diversified channels for asset entry and exit, further enhancing liquidity and accessibility.

Looking ahead, after the successful launch of the native USDT, the Kaia team is fully promoting the issuance plan for the Korean Won (KRW) stablecoin. Kaia's "Stablecoin Summer" has just begun. Sam Seo, the chairman of Kaia Chain, stated that the previous Klaytn team was involved in the Bank of Korea's CBDC project, laying a solid foundation for stablecoin development. In addition, the Finschia mainnet, which has now become a key component of the Kaia ecosystem.