The Korean version of the TON blockchain? Klaytn, backed by Kakao, boasts a TVL ranking within the top 15.
In the rapid development of blockchain technology, Klaytn, as a benchmark public blockchain in South Korea, has recently demonstrated its relentless pursuit of technological innovation and ecosystem expansion. Binance’s support for the Klaytn network upgrade and hard fork, along with Klaytn’s own deepening of ecosystem development, together paint a picture of an ever-evolving blockchain platform.
The latest developments in Klaytn are not merely a simple accumulation of technological upgrades but a concrete realization of its long-term vision. In its 2023 roadmap, Klaytn outlines its goal of achieving widespread adoption through the three pillars of sustainability, verifiability, and community. The strategic objectives and detailed measures behind this highlight its commitment to ecosystem sustainability and transparent governance, as well as its dedication to building an active community.
In this series of updates, we can see that Klaytn is steadily advancing its ambitious roadmap, dedicated to building a more open and interconnected blockchain world. Let’s continue to delve deeper and comprehensively interpret this South Korean public blockchain backed by the internet giant Kakao, and how it is solidifying its position in the global blockchain competition.
Backed by South Korea’s internet giant Kakao, Klaytn enjoys a clear first-mover advantage.
Now, let’s delve deeper into Klaytn itself, the South Korean public blockchain launched in 2019, whose influence extends far beyond its borders.
Klaytn is not only one of the four major blockchains supported by OpenSea, but it also ranks 14th in Total Value Locked (TVL) in the Decentralized Finance (DeFi) space, with its native token $KLAY holding the 66th position in market capitalization.
The driving force behind Klaytn is the South Korean internet giant Kakao, a company whose influence in South Korea can be compared to that of Facebook. Kakao not only operates the most widely used instant messaging app in South Korea with 53 million active users, but it also allows these users to use Klaytn’s blockchain wallet directly within Kakao’s apps. Imagine the immense user traffic it would bring to Web3 if Facebook’s Messenger or WhatsApp integrated an Ethereum wallet.
Initially, Klaytn positioned itself as an enterprise-oriented, service-centric platform, employing a “hybrid” design that cleverly combines the decentralization and distributed governance features of public blockchains with the low latency and high scalability of private chains. Klaytn’s innovation goes beyond just technology; it also collaborates with South Korean banks and participates in Central Bank Digital Currency (CBDC) projects, demonstrating its influence and ambition in the fintech space.
In September 2021, Klaytn entered the Klaytn 2.0 era, shifting its focus from enterprise services to a “Metaverse Blockchain,” expanding its target audience from enterprises to ordinary users. The primary projects within its ecosystem are gradually shifting towards AAA-grade games, Play-to-Earn (P2E) games, NFTs, and DeFi services that support the metaverse business.
Klaytn’s network architecture is enterprise-centric and utilizes an enhanced version of the Istanbul Byzantine Fault Tolerance (IBFT) consensus mechanism, replacing traditional Proof of Work (PoW) and Proof of Stake (PoS) mechanisms. This practical Byzantine fault-tolerant consensus mechanism enables Klaytn to operate a hybrid infrastructure that combines the advantages of private and public blockchains, offering a unique solution.
Additionally, although Klaytn primarily adopts IBFT as its main consensus mechanism, it also provides support for a PoS consensus mechanism with a limited number of validators for beginners. In the Klaytn network, there are three types of nodes: Consensus Nodes (CN), Proxy Nodes (PN), and Endpoint Nodes (EN). These nodes work collaboratively, forming an efficient network structure that ensures fast transaction processing and secure data transmission.
Klaytn’s EVM compatibility means that any tools running on Ethereum can seamlessly operate on Klaytn, but with faster speeds. For instance, Klaytn’s smart contract virtual machine can process at least 4,000 unique transactions per second within one second, and the gas fees are only one-tenth of Ethereum’s.
To further promote enterprise adoption, Klaytn has designed a complex architecture that supports the addition of customizable blockchains. Validator nodes are operated by members of the Klaytn Governance Council, who must stake at least 5 million KLAY coins to become Core Cell Operators. In return, they receive 34% of the block rewards.
As we delve deeper into our understanding of Klaytn, its enterprise-level starting point and transformation into a metaverse public chain vision become particularly intriguing. Next, we will explore Klaytn’s ecosystem and how it positions itself in this rapidly evolving field.
The diversified application ecosystem centered around the metaverse forms the core competitive advantage of Klaytn.
In Klaytn’s transformation journey, its latest slogan, “Becoming the ‘One-Stop’ Blockchain for Metaverse Builders,” stands out prominently. This slogan is not just a declaration; it represents Klaytn’s commitment to providing a comprehensive blockchain solution — from open-source toolkits to a high-performance mainnet, community collaboration, and financial support. Klaytn aims to offer everything that metaverse builders need.
Currently, the “metaverse ecosystem” within Klaytn is rapidly taking shape. Its ecosystem spans various domains, including gaming, NFTs, DeFi, and more, with major projects in each area. What’s worth noting is that the Klaytn Ecosystem Foundation has announced an investment of up to $1 billion to support high-potential projects through grants, investments, and incentive programs. This move is expected to inject significant momentum into the ecosystem’s development.
In the gaming sector, while Klaytn’s on-chain projects may be relatively fewer in number and Total Value Locked (TVL), their potential is substantial. Klaytn has established partnerships with gaming giants like Wemade, Netmarble, Neowiz, among others, which bring significant growth potential to its ecosystem. For instance, Wemade’s “Legend4” is a Play-to-Earn (P2E) game based on Klaytn, and since its release, it has attracted over 1.3 million concurrent online players, an impressive achievement.
Klaytn has also developed the official metaverse land project called KlayCity. It’s a game based on exploration, cleaning, and trading, providing players not only with a gaming experience but also a platform for interacting with the metaverse.
In the DeFi sector, Klaytn’s Total Value Locked (TVL) has reached $1.18 billion, a notable figure given its diluted market capitalization of approximately $3.2 billion. Klaytn has also partnered with the Japanese fintech company SORAMITSU to jointly build a scalable DEX architecture, further promoting the development of the Klaytn DeFi ecosystem.
Klayswap, Klaystation, and Orbit Bridge are the three major participants in the Klaytn DeFi ecosystem. Klayswap, as the largest DEX on Klaytn, boasts a TVL of approximately $776 million, demonstrating its strong position in the market. Meanwhile, Klaystation and Orbit Bridge offer users the ability to explore the ecosystem and facilitate cross-chain interactions, respectively.
In the NFT space, Klaytn is one of the four blockchain networks supported by OpenSea, with over 1,800 Klaytn-based NFT projects. Key on-chain NFT projects on Klaytn include Klapes, Klip Drops, NFTBank, and more, enriching Klaytn’s NFT ecosystem and providing users with diverse choices.
Regarding wallets, Klaytn supports various wallets, including MetaMask, Huobi Wallet, Coin98, alongside its native ecosystem wallets like Kaikas and Klip. Klip wallet, in particular, is embedded within the Kakaotalk messaging app, connecting its millions of KYC users to various DApps within the Klaytn ecosystem, providing a substantial user base for Klaytn’s ecosystem.
Through these initiatives, Klaytn is building a diverse and feature-rich ecosystem.
Summary of KLAY Assets: Passports and Lubricants for the Klaytn Ecosystem
In Klaytn’s economic model, the KLAY token is a key element that sustains the network’s vitality. It serves not only as a medium of exchange but also as a value carrier within the ecosystem. Its diverse utility and carefully designed fund structure collectively support the prosperity of this ecosystem.
As the native token of the network, KLAY primarily serves as a means to pay transaction fees, similar to ETH on Ethereum. Any transactions or smart contract operations carried out on the Klaytn network require KLAY as fuel, ensuring the smooth operation of the network.
Within Klaytn’s DeFi ecosystem, KLAY tokens are a primary avenue for generating income. Users can earn returns by staking KLAY or providing liquidity on DeFi protocols like KLAYswap and KLAYstation. These returns may be in the form of KLAY itself or tokens from other projects, further enriching users’ investment options.
Klaytn’s fund structure is designed to continually incentivize network participants. Each new block’s creation is accompanied by the accumulation of new KLAY issuance and transaction fees, collectively forming block rewards. These rewards are distributed according to established ratios, with 34% going to the Governance Council, 54% allocated for Proof of Contribution (PoC), and 12% entering the Klaytn Improvement Reserve (KIR), ensuring the network’s healthy development and effective governance.
Klaytn’s inflation rate is set at an annual addition of 300 million KLAY to support reward distribution and ecosystem development. 9.6 KLAY are generated per block for block rewards. This inflation mechanism may be adjusted based on decisions made through the Klaytn governance process.
Klaytn’s token model not only fuels activities within its ecosystem but also paves the way for the tokenization of real-world assets. As Klaytn continues to explore and innovate in this field, we have reason to believe that it will take solid steps towards its goal of building a metaverse public chain.
As Klaytn transitions from South Korea to the global stage, it is destined to bring innovative experiences to Web3.
As Klaytn continues to develop and mature, it carries with it not only technological innovation but also boundless imagination for the future digital world. From enterprise-level solutions to metaverse builders, Klaytn is gradually realizing its grand vision.
In this rapidly changing blockchain space, Klaytn stands out with its unique ecosystem and robust technical foundation. Backed by the support of internet giant Kakao, Klaytn not only boasts a strong user base in South Korea but is also expanding its influence globally. Through continuous innovation and collaboration, Klaytn is blurring the boundaries between the real world and the digital world, providing users with a new interactive digital living space.
Klaytn’s token model and economic structure provide value and incentives for every participant in its ecosystem, ensuring the network’s vitality and sustainability. With the addition of more applications and services, we can expect Klaytn to become a crucial bridge between the real world and the digital world in the future, offering a solid platform for explorers of the metaverse.
In the journey of exploring the unknown, every step taken by Klaytn is filled with possibilities. It is not just a technological platform but also a collective of dreams and innovations, a digital universe that everyone can participate in shaping. As Klaytn continues to progress, we have every reason to believe that it will play a key role in ushering in a new era of building the metaverse.
