Crypto Quill

The blockchain industry is witnessing a historic moment as two leading platforms, Klaytn and Finschia, have announced their intention to merge into a single network. The proposal, which has been approved by the governance members of both foundations, aims to create Asia’s largest and most competitive Web3 ecosystem.

What is the Chain Merge Proposal?

Klaytn and Finschia are both public blockchains that have been developed and operated by Klaytn Foundation and Finschia Foundation, respectively. Klaytn Foundation is a spin-off from Kakao, South Korea’s largest mobile platform, while Finschia Foundation is an independent successor to LINE Blockchain, the mainnet and digital asset business of LINE Tech Plus, a subsidiary of Japan’s leading messenger service LINE.

The two foundations have jointly proposed to launch a new mainnet project by integrating their existing blockchain ecosystems. The proposal was submitted to their respective governance members for open discussion and voting, which took place from January 26 to February 2, 2024. The results showed overwhelming support for the chain merge, with 90% of Klaytn members and 95% of Finschia members voting in favor.

The chain merge is designed to create a highly competitive mainnet ecosystem by combining the capabilities and strengths of Klaytn and Finschia. The two foundations will form an integrated organization, sharing technologies, services, and business networks, working alongside Kakao, LINE, and other partners who have contributed to the development and expansion of their respective mainnets. By doing so, they plan to establish themselves as Asia’s largest Web3 ecosystem, taking the lead to drive blockchain mass adoption in the region.

What are the Benefits of the Chain Merge?

The integration of Klaytn and Finschia will bring about several benefits for the blockchain industry and the users of both platforms. Some of the key benefits are:

• The creation of Asia’s largest Web3 ecosystem: Klaytn’s robust technical infrastructure and strong presence in South Korea, Singapore, and Vietnam, will be combined with Finschia’s comprehensive service network that is popular in Japan, Taiwan, Thailand, and Abu Dhabi. Post-merge, Klaytn’s DeFi and gaming services and Finschia’s NFT, payment, and AI services will come together to create a massive ecosystem of 420+ DApps and services, 45+ governance partners, and 450+ Web3 resources (based on foundations and key ecosystem participants) – the largest Web3 network in Asia. The merged blockchain will also inherit integration with both Kakao and LINE messengers, creating a powerful ecosystem with over 250 million potential Asian user touchpoints.
• The enhancement of scalability, interoperability, and sustainability: The merged blockchain will leverage the technological expertise of both Klaytn and Finschia Foundations, and support both EVM and CosmWasm frameworks, making it compatible with both Ethereum and Cosmos ecosystems. The merged blockchain will also adopt a new consensus mechanism and governance model, increasing the decentralization and participation of the community. KLAY and FNSA, the native coins of the two blockchains, will also be replaced by a new native coin with all-new tokenomics, featuring a sustainable inflation rate and a fair distribution scheme.
• The acceleration of innovation and collaboration: The merged blockchain will foster a vibrant and diverse environment for innovation and collaboration, attracting more developers, users, and partners from various sectors and regions. The unified foundation will continue to pursue ecosystem expansion in the RWA tokenization, GameFi and DeFi verticals through collaborations with Japanese, South Korean, and Southeast Asian partners, while continuing to develop messenger-based Web3 services and the digital commerce platform. With access to every KakaoTalk and LINE user, the new public blockchain will also act as a springboard for Asia’s IT and entertainment enterprises.

What are the Next Steps for the Chain Merge?

Following the passage of the proposal, the two foundations will set up a joint task force to merge the two chains and establish an integrated foundation in Abu Dhabi by the second quarter of this year. To operate the foundation efficiently, the foundation will adopt a single governance system with previous operating teams transferred to an integrated foundation. In addition, Finschia and Klaytn foundations will jointly operate the board with the same number of directors from each foundation.

The joint task force will also work on the development plan for the new merged blockchain, which will include the following milestones:

• Q2 2024: Launch of the testnet and the new native coin
• Q3 2024: Launch of the mainnet and the migration of existing DApps and services
• Q4 2024: Launch of the new governance platform and the new DeFi infrastructure

The chain merge is expected to be completed by the end of 2024, marking the birth of a new blockchain giant in Asia.