"Korean Ethereum" Kaia Ecosystem Evolution: An On-Chain Growth Paradigm Centered on Mini Dapps

1. Overview of the Kaia Blockchain Ecosystem

1.1 Origins and Team Background

Kaia is the new ecosystem formed after the merger of Klaytn and Finschia. Klaytn was launched by Ground X, a subsidiary of the Kakao Group, in June 2019, with early governance members including well-known South Korean companies such as LG Electronics, Celltrion, and Netmarble. Finschia was initially launched by LINE in August 2018 and established a foundation in Abu Dhabi in April 2023. In January 2024, the two chains proposed a merger, and by the end of August 2024, they officially merged to launch the Kaia mainnet, which will be managed by the newly established Kaia DLT Foundation.

Kaia aims to be an L1 blockchain focused on large-scale applications, featuring high TPS and developer-friendly characteristics. Its core advantage lies in a mature SDK system and deep integration with KakaoTalk and LINE platforms, supporting decentralized applications to run directly on these mainstream social platforms. As a public blockchain based on the BFT consensus mechanism, Kaia is highly optimized and committed to achieving 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 Abu Dhabi Finschia Foundation 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 investment 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 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) at 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 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), and consensus information is exchanged only within the committee, 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 EVM-compatible and supports smart contracts within 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 with Kaia, enabling secure interoperability between Kaia and Ethereum assets. Additionally, Kaia closely integrates 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, which provides a foundation for the widespread access of Kaia ecosystem applications. In May 2025, Tether officially issued native USDT on the Kaia chain, enabling 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. When a block is generated, the newly added KAIA is distributed at 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 the infrastructure fund (25%). Kaia supports on-chain governance, allowing annual inflation rates and fee models to be adjusted 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 stock 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, bringing the massive user bases of Kakao and LINE into the Web3 ecosystem; technologically, it adopts a second-level finality consensus algorithm to provide users with low latency and high throughput experiences; ecologically, it quickly integrates key assets such as stablecoins (e.g., 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

Over the past year, Kaia has focused on infrastructure construction and ecosystem expansion, continuously promoting multiple dimensions around the Mini Dapp ecosystem landing, on-chain stablecoin channel construction, ecosystem investment, strategic cooperation, and developer and community support, 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 approximately 1 second block time and extremely low Gas fees to meet the demand for on-chain experiences from a massive user base. At the same time, the Kaia Wave program is jointly created 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. This leverages 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. The program aims to integrate technological and business resources to build a bridge for global Web3 projects and local Asian ecosystems, promoting the proliferation 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 has jointly launched the Mini Dapp Growth Competition with LINE Dapp Portal. The competition focuses on the growth of monthly active users (MAU) and on-chain token holders of the projects, with incentive mechanisms and exclusive display resources in place to discover applications with high growth potential. Currently, the competition has successfully held two phases, continuously driving the acceleration of the Kaia on-chain Mini Dapp ecosystem, attracting more and more developer teams to settle in and be active on the Kaia network.

Alongside Mini Dapp, the Dapp Portal has also been launched—a Dapp directory and entry that can be accessed directly via 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, enjoy reward mechanisms, and conduct asset trading within them. 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 threshold for Web3 services to a minimum. 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, aimed at providing users and developers with a more robust and convenient on-chain financial experience. Following Kaia's rapid gathering of over 35 million users on LINE and Kakao platforms through the lightweight and 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, and will natively issue USDT on the Kaia chain in May 2025.

Unlike traditional USDT transferred through cross-chain bridges, Kaia's USDT is fully deployed in the form of native contracts on the Kaia network (EVM compatible), directly hosted 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 of 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 within 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.

At the same time, several 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 all support deposits and withdrawals for USDT--KAIA. These launches provide users with more diversified asset entry and exit channels, further enhancing liquidity and accessibility.

Looking to the future, 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 participated in the Bank of Korea's CBDC project, 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 Bank of Korea's CBDC consultation project, with subsequent simulation tests executed by Klaytn and its subsidiary Ground X. The collaborative experiences of these institutions have further enhanced Kaia's credibility and expertise in building 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.