Forward the original title: A Comparison with the TON Ecosystem: An Analysis of KAIA’s Future Restart Path After Brand Revamp

Preface

KAIA has garnered attention due to the merger of Klaytn and Finschia. With the support of Kakao and LINE’s user base of over 250 million in East Asia, it is actively building a Web3 ecosystem. As the development of the Web3 ecosystem becomes a trend, KAIA’s positioning in this space has the potential to bring opportunities to participants. Recently, the release of Portal v1.2 has helped enhance the ecosystem by incentivizing key DeFi pools. TON, supported by Telegram, has also performed well in the Web3 field. Although both ecosystems rely on social platforms, their business models, technologies, and market positioning differ. A comparison of KAIA and TON ecosystems allows us to gain deeper insights into the project characteristics, uncover potential blockchain application scenarios, and provide strategic perspectives for investment and innovative applications, while grasping the trends of the digital economy.

Klaytn Brand Revamp (KAIA) Focus Areas

• Why the name change and update?
• What is the development roadmap after the update?
• Is there a similar development relationship between Klaytn and LINE, similar to TON’s relationship with Telegram?
• What are the similarities, differences, and advantages/disadvantages between Klaytn and TON?
• What is the current development status of Klaytn? Does it have unique development prospects?

1. Review of KAIA Brand Revamp

On April 30, 2024, Klaytn and Finschia officially merged into a unified Layer-1 platform and rebranded as Kaia. Backed by the strong support of two giants, Kakao and LINE, this merger undoubtedly provides significant momentum for its development. Kakao enjoys a 96% usage rate in South Korea, while LINE is widely popular in Japan, Taiwan, Thailand, and other regions. Together, they give Kaia a potential user base of over 250 million. With such a large user base, Kaia is expected to greatly enhance the adoption and acceptance of blockchain technology in the East Asian market, laying a solid foundation for the widespread application of blockchain. This will further help create the largest and most vibrant Web3 ecosystem in Asia.

• In June 2024, Kaia successfully launched its testnet.
• On August 29, 2024, Kaia’s mainnet was officially launched, showcasing its strong technical capabilities and development potential (with support for upgrades from exchanges such as Binance during this period).

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2. Roadmap: KAIA Phase Plan

On April 30, 2024, Klaytn and Finschia officially merged into a unified Layer-1 platform and rebranded as Kaia. With the joint support of two giants, Kakao and LINE, this merger provides significant momentum for its development. Kakao enjoys a 96% usage rate in South Korea, while LINE is widely popular in Japan, Taiwan, Thailand, and other regions. Together, they give Kaia a potential user base of over 250 million. With such a large user base, Kaia is expected to greatly enhance the adoption and acceptance of blockchain technology in the East Asian market, laying a solid foundation for the widespread application of blockchain. This will further help create the largest and most vibrant Web3 ecosystem in Asia.

In June 2024, Kaia successfully launched its testnet. On August 29, 2024, Kaia’s mainnet was officially launched, showcasing its strong technical capabilities and development potential (with support for upgrades from exchanges such as Binance during this period).

Next, let’s analyze the development plan for the brand restructuring based on the official roadmap. The overall strategy follows a two-step approach: in the short term, the focus is on building the L1 blockchain and improving infrastructure and basic services; in the long term, the goal is to expand institutional and official-level partnerships and customers through various channels, aiming to create the largest Web3 ecosystem in Asia.

Short-term roadmap:

• Q1 2024: Integration, construction, and operation of Klaytn & Finschia (integrating both parties’ technical advantages and resources to lay a solid foundation for brand transformation and business expansion).
• Q2 2024: Establishing the new brand Kaia, building a joint marketing system, and community integration (enhancing communication and collaboration with partners, advancing community integration, building consensus, and creating a community ecosystem).
• Q3 2024: Issuance of a new integrated token and provision of Swap services (enriching the financial product system within the Kaia ecosystem).
• Q4 2024: Foundation restructuring and joint business promotion, establishment of the second integrated network (optimizing organizational structure and business layout, building a foundation for long-term sustainable development).

Long-term roadmap:

• Build infrastructure that meets institutional-level needs (integrated tokens and convenient deposit/withdrawal paths, lowering institutional entry barriers).
• Strengthen large-scale DeFi infrastructure (develop the DeFi ecosystem and expand RWA-related services).
• Launch native stablecoins (the foundation for the ecosystem).
• Accelerate the Asian community (cultivate developer and user communities in different countries, expand governance and ecosystem partnerships).
• AI DApp discovery (this wave must be seized).
• Large-scale Web2 tokenization on the blockchain (transition from Web2 to Web3).
• Global intellectual property cooperation.

The roadmap does not emphasize the connection with LINE’s ecosystem, unlike TON, which has a strong link with Telegram. This could lead to entirely different development outcomes.

3. KAIA Ecosystem User and Project Activity

Before the merger, Klaytn and Finschia each formed different on-chain ecosystems, which laid a certain foundation for the merged Kaia in terms of user base and on-chain projects. While Kaia’s data has not been clearly defined yet, insights can be gained from the ecosystems and project activity of Klaytn and Finschia.

Figure: Data Comparison After KAIA Brand Restructuring

Source: @10xWolfDAO Rearranged

4. KAIA vs TON Ecosystem: A Multidimensional Comparison

1. Core Business Logic Comparison

TON: Its unique business formula is TON = Telegram user base + Web3 mini-programs + PoS node clusters. The core strategy combines Web2 and Web3. By leveraging Telegram’s massive user base, Web3 mini-programs are deeply embedded into users’ daily social interactions, while PoS node clusters ensure efficient network operation and security, offering users a new decentralized application experience.

Kaia: In contrast, Kaia’s business formula is Kaia = Weak LINE user base + stablecoins + institutional services (INFRR + RWA). The core focus is on weak LINE integration and strong RWA integration. Although Kaia has a weaker user base compared to Telegram, it still benefits from a certain traffic advantage through its partnership with LINE. Kaia places a strong emphasis on the issuance and application of stablecoins and providing professional services such as infrastructure as a service (INFRR) and real-world asset tokenization (RWA) for institutions, aiming to build a more robust and sustainable business ecosystem.

2. User Base and Market Positioning

KAIA: Deeply rooted in the East Asian market, Kaia benefits from LINE’s 178 million monthly active users in Japan, Taiwan, Thailand, and KakaoTalk’s 96% penetration rate in South Korea, resulting in 49 million monthly active users. It accurately targets the social and financial needs of Asian users. The user base consists mainly of those accustomed to Asian social culture, with high demand for local financial services and frequent social interactions. Kaia aims to seamlessly integrate blockchain services into their familiar social and payment scenarios, creating a Web3 ecosystem experience with an Asian touch, much like a local service platform tailored for residents.

Active user base valuation, main user regions:

Telegram has about 900 million users (2024), with a valuation exceeding $30 billion (2024), mainly in Russia, India, Brazil, Ukraine, and the US.

LINE has about 200 million users (2022), valued at over $6.7 billion (calculated by the same proportion as Telegram’s valuation), mainly in Asia.

TON: Based on Telegram’s approximately 700 million monthly active users worldwide, TON’s market reach is globally expansive, particularly with a solid user base in Europe and the Middle East. TON’s user base is more diverse, consisting of global tech enthusiasts and young users who value privacy and decentralization. It is more like a comprehensive digital platform for the world, offering a decentralized space for users from different regions and cultural backgrounds to communicate, trade, and innovate freely.

Market Cap FDV TVL 24h Volume Validators User Base Active Wallets

TON: $12.9 billion $25.9 billion $390 million $300 million $3.83 billion 32.47 million

Kaia (data not yet accurate after swap): $730 million $730 million $55 million $10 million

3. Technical Architecture and Performance

KAIA: Kaia uses the pBFT consensus mechanism, which functions like an efficient traffic control system, supporting fast transaction processing of up to 4,000 transactions per second, ensuring efficient and smooth transactions. Additionally, it is compatible with the Ethereum Virtual Machine (EVM), providing a bridge for developers to easily migrate their existing projects to the Kaia ecosystem. This technical support enables the rapid development and deployment of RWA, DeFi, and NFT applications.

TON: TON employs a multi-chain parallel mechanism combined with the PBFT consensus algorithm, building a lightning-fast transaction network. Its second-layer network — instant payment channels — provides high-frequency traders with dedicated high-speed trading channels, akin to providing top-tier racetracks for racers. While TON is not directly compatible with EVM, it excels in cross-chain interoperability. Through convenient cross-chain bridging technology, it allows assets to flow freely between different blockchains, creating a massive intergalactic trade network that easily connects resources and values across different “planets” (blockchains).

4. Ecosystem Projects and Use Cases

KAIA: Kaia’s ecosystem features a diversified layout, including decentralized exchanges (such as DragonSwap), liquid staking platforms (like Stake.ly), lending services (such as KlayBank), yield aggregators, and more. Its use cases focus on innovative integration of social and financial services. For example, leveraging KakaoPay and LINE Pay’s user habits to promote blockchain payments in social contexts, while using social interaction to drive DeFi and NFT projects, facilitating project promotion and development. It’s akin to integrating financial services into social gatherings, where every interaction could become an opportunity for value creation.

TON: TON’s ecosystem has given rise to popular projects like Notcoin and Catizen, with significant achievements in the stablecoin sector, such as explosive growth in on-chain USDT supply, injecting strong liquidity into the ecosystem. Its use cases span decentralized social media, payments, and DApps development. TON also focuses on building a cross-chain ecosystem, achieving interconnectivity with other blockchain projects. It’s like building a massive cosmic alliance, with resources and collaboration shared among various “planets” (projects).

5. Regulatory Compliance

KAIA: Kaia mainly focuses on the East Asian market, benefiting from the relatively stable and clear regulatory environment in countries like Japan and South Korea. Under this regulatory framework, Kaia can operate its business in an orderly manner, with greater space for cooperation with local financial institutions and government departments. This is like competing in a well-regulated arena, where Kaia can confidently apply its strategic and technical advantages, minimizing risks due to policy changes, and providing reliable protection for users and investors.

TON: As a global decentralized project, TON faces complex and ever-changing regulatory environments across the world. Different countries and regions have vastly different regulatory policies regarding blockchain and cryptocurrencies, so TON must constantly adapt and coordinate with various regulatory requirements globally. This is like navigating a thorny path, where careful balancing between compliance and innovation is necessary. Any misstep could lead to regulatory challenges that impact the project’s progress and development.

Figure: Comparison of Features and User Profiles of Different Social Platforms

Source: @10xWolfDAO Rearranged

In terms of the East Asian market and local demands, Kaia has a distinct advantage over TON. However, TON still holds appeal in terms of global decentralization and privacy protection. The two ecosystems complement each other in terms of market positioning and user needs. Additionally, the arrest of TON’s founder has somewhat weakened market trust and stability, providing Kakao and LINE an opportunity to enter the market.

Nonetheless, TON still has unique appeal in decentralization and technological innovation, particularly within the international developer community and decentralization enthusiasts. Therefore, Kakao and LINE are more likely to focus on replacing TON’s social + blockchain application position in the East Asian market, rather than completely replacing TON’s global influence. As shown in the figure above, Kaia’s official website already indicates its target user market is Asia.

5. KAIA Ecosystem Development Issues Analysis

Currently, the Kaia ecosystem shows a relatively diversified project layout but faces some key development challenges. Based on on-chain data disclosed by DeFiLlama, the ecosystem’s development can be analyzed in depth from the following dimensions.

Figure: KAIA - TVL Data Trend Source: Defillama x: @10xWolfDAO

Figure: Data Comparison of Projects in the Same Track Source: Defillama X: @10xWolfDAO

1. Ecological Structure and Project Distribution Imbalance, High Dependence on Leading Projects

The Kaia ecosystem encompasses various categories such as decentralized exchanges (DEX), liquid staking, lending, yield aggregators, and cross-chain solutions. This diverse structure helps attract a broad user base with different preferences and promotes widespread ecosystem adoption. However, the concentration of projects is high, especially in DEX and liquid staking projects (e.g., NEOPIN, Lair Finance, DragonSwap, and Capybara Exchange), which attract the majority of users and trading volume. This indicates that Kaia’s users prefer high liquidity investment tools, while demand for other categories is still underexplored.

The trading volume and user activity of leading projects are significantly higher than other protocols, suggesting that Kaia’s ecosystem is not yet fully mature. In the future, Kaia could balance its ecosystem by supporting more innovative projects, encouraging diversified user investment and interaction to achieve more stable ecosystem growth.

2. User Trading Preferences and Conversion

Projects like NEOPIN, Lair Finance, and DragonSwap have accumulated trading volumes of nearly $600M, $182M, and $715K respectively. These high-trading-volume projects are concentrated in DEX and liquid staking fields, showing a high demand for these projects. Especially, DEX platforms provide convenient token trading channels, attracting frequent traders. User activity is primarily focused on projects offering high liquidity and stable yields, indicating that Kaia’s users tend to favor more liquid products. However, the relatively single application scenario struggles to meet diverse user demands.

Moreover, user base conversion remains a challenge. Effectively converting the vast user base of social platforms into active blockchain ecosystem users is a key issue for Kaia. If the platform fails to expand its application scenarios and improve user conversion efficiency, it may lead to user churn, affecting long-term ecosystem growth.

3. Total Value Locked (TVL) and Liquidity Analysis

Although the leading projects in Kaia have high trading volumes, the overall TVL in its ecosystem remains low.

Lending platforms (e.g., KlayBank) and liquid staking projects (e.g., Stake.ly) have the potential to enhance TVL by attracting more funds into the ecosystem through staking rewards and locked incentives. If Kaia further enriches its DeFi tools, adding high-yield products like leveraged trading and options, it could attract more users and increase capital retention, significantly boosting TVL.

4. Technical and Ecological Infrastructure Deficiencies

Despite Klaytn’s strong network performance and low transaction costs, it still faces limitations in DeFi and cross-chain compatibility, particularly when compared to Ethereum’s ecosystem. Klaytn and Finschia have not formed a unified resource integration and marketing strategy in ecosystem development. Independent development projects struggle to collaborate, and there has been insufficient developer support and funding in promoting NFTs or social applications. In contrast, mainstream projects on other chains receive more developer resources and community attention.

5. Cultural Characteristics and Policy Environment of the Japanese and Korean Cryptocurrency Ecosystem

The Japanese and Korean cryptocurrency ecosystems have unique cultural characteristics and policy environments. Users in Japan and South Korea, especially in South Korea, have a high acceptance of high-risk financial tools, evident in their enthusiasm for cryptocurrency trading and preference for short-term investments. On one hand, users tend to pursue high-return financial tools, which may lead to over-speculation and market volatility, increasing operational risks for the projects. On the other hand, although the policy environment in Japan and South Korea is relatively loose, regulatory gaps still exist, posing potential risks such as market manipulation and money laundering, threatening the healthy development of the ecosystem.

6. Limitations of Operational and Marketing Strategies

Despite the high brand recognition of Kakao and LINE in the social app market, both companies have been cautious in promoting blockchain projects. This contrasts with the high-profile marketing and incentive strategies of many mainstream blockchain projects. Klaytn and Finschia lack clear user incentive strategies and educational promotion activities, resulting in insufficient momentum for ecosystem development. There has also been limited cross-chain collaboration and liquidity sharing with other chains, making it difficult to attract users and developers from other ecosystems. This limits the project’s scalability and cross-chain asset liquidity, indirectly slowing ecosystem growth.

6. KAIA’s Future Restart Path

Kaia’s competitive edge lies in its regional advantages and the stability of its regulatory environment. In markets like Japan and South Korea, which have high compliance requirements, Kaia can legally offer financial and NFT services, enhancing its trust and adoption in the Asian market. Compared to TON’s global decentralized positioning, Kaia aims to quickly dominate the East Asian market through localized services and regulatory support.

Kaia’s rise in the East Asian market is not just a result of the merger between Klaytn and Finschia; it also represents the potential of blockchain in mainstream social and payment applications. Its success will depend on continued investments in diverse products, user education, and market promotion to achieve broad Web3 ecosystem coverage. From the current activity levels and protocol development, Kaia’s journey toward a thriving ecosystem still faces challenges. Recently, Kaia launched the Portal task (announced on October 30) and plans to increase rewards in Portal v1.2 to attract more participants. Different exchanges in various regions have shown support for Kaia, as summarized in the table below, though the ecosystem’s operational status needs long-term monitoring.

Looking ahead, Kaia, as an emerging blockchain project formed by the merger of Klaytn and Finschia, possesses unique competitive advantages and growth potential. Its regional strengths and stable regulatory environment provide strong backing for its rise in the East Asian market. Leveraging the powerful user bases of LINE and Kakao, Kaia is positioned to build a widely influential Web3 ecosystem in Asia.

With its rebranded identity, KAIA is carving its own path in comparison and competition with the TON ecosystem. Its future is full of uncertainties, yet brimming with infinite possibilities, making it a project worth ongoing attention and anticipation.

Disclaimer:

1. This article is reproduced from [ForesightNews]. Forward the original title “Comparing the TON Ecosystem: Analysis of KAIA’s Future Restart after Rebranding”. The copyright belongs to the original author [WolfDAO]. If you have any objections to the reprint, please contact Gate Learn team, the team will handle it as soon as possible according to relevant procedures.
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