An investor participating in the KAIA community said this about KAIA, one of Korea's leading Layer 1 virtual assets. KAIA was born from the integration of the Klaytn Foundation, Kakao's Blockchain mainnet, and the Finschia Foundation, LINE's Blockchain mainnet. It is currently operated independently of Kakao and LINE by the KAIA DLT Foundation, a nonprofit corporation in Abu Dhabi.
According to the KAIA white paper, the foundation's initial key strategy is to activate Mini Dapps through linkage with the LINE messenger. Mini Dapps are small decentralized apps based on the KAIA Blockchain that can run instantly within the LINE messenger without installing a separate application. If the LINE messenger is the platform, Mini Dapps are separate content.
The KAIA DLT Foundation had planned to unveil more than 150 Mini Dapps by the first half of last year, but only 72 have been released so far. Of these, 49 are games, drawing criticism that there are limits to targeting a diverse range of users.
An industry official said, "The reward-based service launched with the Web3 healthcare platform SuperWalk drew a large influx of new users in a short period, but it lacked innovative content to capture users over the long term."
KAIA's slump is also evident in the total value locked (TVL) metric. According to DefiLlama, a Decentralized Finance (DeFi) data platform, KAIA's TVL, which was $39.87 million (about 59.5 billion won) at the time of the mainnet launch in Aug. 2024, has fallen nearly 70% to around $13 million (19 billion won).
TVL refers to assets locked within DeFi systems, a concept similar to total deposits or assets under management in traditional finance. A decline in TVL indicates ▲ decreased project popularity ▲ lack of liquidity ▲ reduced user trust ▲ a drop in coin prices, and more. KAIA is currently moving sideways in the 80-won range, down more than 80% from its all-time high of 590 won.
After the mainnet launch, KAIA also faced controversy that, during the process of swapping Klay tokens into new KAIA tokens at a set ratio, a small group exchanged quantities among themselves to falsify trading volume and monopolized more than 90% of the event prize.
Investors hold Seo Sang-min, chair of the KAIA DLT Foundation, responsible for the project's slump, but decisions at the KAIA foundation are made by Blockchain validators in a Governance Council (GC) composed of various partners. Decisions are made by votes of GC members consisting of 37 companies in total, with one voting right granted per 5 million KAIA.
At least one-third of all GC members and at least one-third of all voting rights must participate in a vote, and an agenda item passes if a majority of the participating voting rights vote in favor.
After Mini Dapps, the KAIA DLT Foundation is focusing on a new business of a won-based stablecoin. A KAIA foundation official said, "A 'won stablecoin proof-of-concept (PoC) case' conducted with a commercial bank will be detailed on KAIA's official blog within this month."