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Klaytn Research Report
Klaytn Research Report
Introduction
Background:
Klaytn, one of the world’s leading blockchain solutions. Their native token, Klay, ranked number 61 on coinmarketcap.com, has a market cap of USD 622 Million and a circulating coin supply of 3.04 billion Klaytn coins (09/22/22) with an inflation rate of roughly 3%. This report has been prepared as part of the onboarding process for Arca to fulfill the requirements as per the interview and onboarding process. They had their ICO in late 2018 with their allocation to team and VC’s at roughly 23%, the rest being reinvested into the system.
Overview:
Developed by South Korean internet giant Kakao Corp in 2019, Enterprise-based blockchain, Klaytn has achieved success domestically through integration with the KakaoTalk messenger app. They have also won the bid for the preferred CBDC chain under Group-X, a subsidiary group owned by Kakao. On top of this, Klatyn’s ultimate goal is to be the platform where NFTs become the enablers of the regime shift from web2 to web3. Klaytn has been around since its official launch in June 2019 and has grown its influence and brand as a blockchain for a variety of use cases, particularly relating to non-fungible tokens or NFTs:
- Gaming
- Domain Name Management
- Music and Entertainment
- Real Estate
- DeFi NFTs
- Fashion and Wearables
- Certification and Academic Credentials
- Concerts and Ticketing
- Sports NFTs
- Supply Chain Management
- Metaverse
Claiming speeds of 4,000 transactions per second with a plan of reaching 10,000 by end of year, Klaytn has developed a robust toolkit for developers and enterprises looking to migrate their existing architecture to the blockchain. Klaytn is a proof-of-stake Ethereum hard-fork that was originally EVM-compatible but has become EVM equivalent and made clear improvements along the way: one-second finality time, IBFT, and custom side chains.
Technical Breakdown:
Blockchain Architecture:
Klaytn has a heavy emphasis on enterprises coming to their chain that is focused on higher throughput, lower latency, and customizable chains. Klaytn writes, “With Klaytn’s ServiceChain, you can build customized side chains that provide dedicated throughput without sacrificing transparency and data integrity. Klaytn welcomingly supports contributors to our ecosystem by providing grants for projects and activities. Community: Our active community is built around the common passion for Klaytn, and the web3 space has your back.” Service chains allow businesses to have their own dedicated environment that has a customizable amount of decentralization and security relative to their business needs.
Istanbul Byzantine Fault Tolerance(IBFT) is part of a class of algorithms to solve BFT that is low latency (few message delays), and within that class of algorithms, it is the fastest time complexity for communication. Another note is that their 35 validators are permissioned, controlling roughly 50% of the circulating KLAY, where many of them are from Kakao and VCs that have recently invested, creating an clear conflict of interest. Klaytn’s argument for centralization is that they will become the bridge for many assets to Web3, making them more palatable major gaming studios and enterprises.
Klaytn has a variety of architectural features that contribute to its strategic development, including:
- Wallet: A dedicated wallet to store KLAY coins and tokens minted on sidechains.
- Block Explorer: Dedicated explorer for managing transactions, reviewing tokens, checking wallet addresses, and more.
- API: Use the Klaytn API services to connect your site and integrate seamlessly.
- Bridge: Bridge across blockchain using the metaverse infrastructure stack.
- Oracle: Draw on the resources of Oracle for information and credentialing.
- Layer 2: WEMIX is major side-chain hosting games such as MIR4
Consensus Mechanism:
Chain Analysis:
KLAY Token:
Klaytn coin trades under the ticker KLAY, and is bought and sold across a variety of exchanges including:
- Binance
- Bittrex
- KuCoin
- Huobi Global
- LBank
- OKX
- CoinEX
- GoPax
The price as of October 5, 2022, is around the .188 cents price point, down over 80% year over year according to the chart from Coinmarketcap:
Number of people watching Klaytn about other chains, which provides us with an indirect representation of its popularity within the industry:
- Ethereum: 2,935,000
- BNB: 1,789,000
- Polygon: 1,298,000
- TRON: 829,000
- Near: 545,000
- Avalanche: 878,000
- Algorand: 592,000
- Theta: 478,000
- EOS: 391,000
- Tezos: 384,000
- Flow: 193,000
- Waves: 181,000
- Wax: 162,000
- Klaytn: 102,000
- Hive: 49,000
- Steem: 40,000
- https://coinmarketcap.com/ (09/27/22)
Competitive Analysis:
The metaverse continues to be a focal point for development across major corporations like Meta and is a growing industry worldwide. Katlyn has a metaverse-specific SDK making it easier to build and onboard metaverse businesses. Klaytn continues to promote itself as a blockchain designed for metaverse application development but faces stiff competition from many other companies operating in this sector.
As you can see, there are dozens of competing blockchains in the metaverse sector which Klaytn has established as their key development area. Klaytn has also won over prominent names like Defi Kingdoms over their chain from Harmony. Some focus areas that make Klaytn a leader in this sector are their focus on metaverse development and the provision of development tools for budding startups. As mentioned earlier, there are a variety of areas that Klaytn focuses on:
- Gaming
- Domain Name Management
- Music and Entertainment
- Real Estate
- DeFi NFTs
- Fashion and Wearables
- Certification and Academic Credentials
- Concerts and Ticketing
- Sports NFTs
- Supply Chain Management
- Metaverse
Key Performance Indicators:
One way to monitor the performance of a blockchain is to evaluate the number of projects, tokens, and transactions on the blockchain. To do this, we can use the blockchain explorer Klaytnscope.
There are 153 NFT projects on the Klaytn blockchain, giving a performance indicator concerning competitors like Ethereum, Solana, Flow, and other blockchains with similar features. Compared to Ethereum, the leading cryptocurrency for Dapp production and has 1000s of NFT projects, Klaytn appears to be much smaller in size based on the development profile. That said, Klaytn does offer some indicators that other blockchains do not. For example, staking tokens is one of the beneficial features of Klaytn, where holders can stake tokens and earn interest based on the size of their stake.
There are a total of 441 fungible token projects built on the Klaytn blockchain:
These tokens are Ethereum bridge tokens using an Ethereum Virtual Machine, as indicated by the contract addresses. Starting with the 0x characters indicates an Ethereum-based pass. Four hundred forty-one token projects are a good indicator of how the blockchain is growing and being used. While still far away from the 1000s of projects housed on Ethereum, Klaytn is growing and has more affordable gas fees than some competitors.
Figure 1 - Total Value Locked (API called through Defi Llama endpoint)
Klaytn Games:
One of the only chains with major AAA game studies building games on-chain, Nino-Kini, and MIR4, with both integrations being far more seamless than other blockchain-developed games. Another evaluation area is the number of users playing games built on the Klaytn blockchain. Klaytn has also created partnerships with the most prominent esports team in Latin America, loud, investing in their guilds. We can see the developments in this area from the Dappradar.com site, which houses all the information on blockchains that support gaming. While there are a handful of gaming developments on Klaytn, the user base is low, indicating that the number of users on Klaytn is not as high as other blockchains, making it less competitive because of a lack of user base.:
Bridging:
Klaytn offers developers various unique development opportunities, including the native KIP protocol. Their business model is well-adapted to scale to companies looking to advance their position within the metaverse, particularly relating to their ability to bridge Ethereum projects using the ERC20 protocol, as well as their native KIP protocol, which allows for native developments on Klaytn. Some of the assets that can be bridged:
https://scope.klaytn.com/bridge
Key Takeaways:
Evaluation and Concluding Remarks:
While Klaytn has done an excellent job at providing a variety of use cases for its blockchain, they are struggling to compete with other blockchains that are more established and have a higher user base. Their head of global strategy highlight that their developer community seems to be lackluster as most of their developers are centralized in Korea, but they are rolling out many more hackathons abroad. Some reasons for the lack of uptake on the Klaytn blockchain are the lack of high-paying programs to incentivize developers, such as grants or investment funding, which many competitors offer. Klaytn has continued to converse with partners to evolve blockchain games away from play-to-earn to other models: stake-to-earn or compete-to-earn. However, as blockchain development becomes more mainstream, Klaytn will likely grow its user base both on the project development side and the investor side because of its wide variety of use cases. Klatyn is one of the only active and native layer-1s in Asia, becoming more critical as Asia is the largest swath of liquidity outside of the US including a recent partnership with Chinese (BSN) blockchain network. Having positioned itself as a solid blockchain offering a wide variety of options specializing in GameFi and NFTs, it does have the potential to scale and grow if it steps up its outreach and marketing services and spreads to the rest of Asia swiftly. For instance, many businesses could take advantage of the services offered by Klaytn, but in the sea of blockchains, many enterprises are unaware of Klaytn. They will likely improve their position within the competitive landscape increased adoption within Asia, continued improvement on-chain, and better marketing.
Klaytn Research Report
Klaytn Research Report
Introduction
Background:
Klaytn, one of the world’s leading blockchain solutions. Their native token, Klay, ranked number 61 on coinmarketcap.com, has a market cap of USD 622 Million and a circulating coin supply of 3.04 billion Klaytn coins (09/22/22) with an inflation rate of roughly 3%. This report has been prepared as part of the onboarding process for Arca to fulfill the requirements as per the interview and onboarding process. They had their ICO in late 2018 with their allocation to team and VC’s at roughly 23%, the rest being reinvested into the system.
Overview:
Developed by South Korean internet giant Kakao Corp in 2019, Enterprise-based blockchain, Klaytn has achieved success domestically through integration with the KakaoTalk messenger app. They have also won the bid for the preferred CBDC chain under Group-X, a subsidiary group owned by Kakao. On top of this, Klatyn’s ultimate goal is to be the platform where NFTs become the enablers of the regime shift from web2 to web3. Klaytn has been around since its official launch in June 2019 and has grown its influence and brand as a blockchain for a variety of use cases, particularly relating to non-fungible tokens or NFTs:
- Gaming
- Domain Name Management
- Music and Entertainment
- Real Estate
- DeFi NFTs
- Fashion and Wearables
- Certification and Academic Credentials
- Concerts and Ticketing
- Sports NFTs
- Supply Chain Management
- Metaverse
Claiming speeds of 4,000 transactions per second with a plan of reaching 10,000 by end of year, Klaytn has developed a robust toolkit for developers and enterprises looking to migrate their existing architecture to the blockchain. Klaytn is a proof-of-stake Ethereum hard-fork that was originally EVM-compatible but has become EVM equivalent and made clear improvements along the way: one-second finality time, IBFT, and custom side chains.
Technical Breakdown:
Blockchain Architecture:
Klaytn has a heavy emphasis on enterprises coming to their chain that is focused on higher throughput, lower latency, and customizable chains. Klaytn writes, “With Klaytn’s ServiceChain, you can build customized side chains that provide dedicated throughput without sacrificing transparency and data integrity. Klaytn welcomingly supports contributors to our ecosystem by providing grants for projects and activities. Community: Our active community is built around the common passion for Klaytn, and the web3 space has your back.” Service chains allow businesses to have their own dedicated environment that has a customizable amount of decentralization and security relative to their business needs.
Istanbul Byzantine Fault Tolerance(IBFT) is part of a class of algorithms to solve BFT that is low latency (few message delays), and within that class of algorithms, it is the fastest time complexity for communication. Another note is that their 35 validators are permissioned, controlling roughly 50% of the circulating KLAY, where many of them are from Kakao and VCs that have recently invested, creating an clear conflict of interest. Klaytn’s argument for centralization is that they will become the bridge for many assets to Web3, making them more palatable major gaming studios and enterprises.
Klaytn has a variety of architectural features that contribute to its strategic development, including:
- Wallet: A dedicated wallet to store KLAY coins and tokens minted on sidechains.
- Block Explorer: Dedicated explorer for managing transactions, reviewing tokens, checking wallet addresses, and more.
- API: Use the Klaytn API services to connect your site and integrate seamlessly.
- Bridge: Bridge across blockchain using the metaverse infrastructure stack.
- Oracle: Draw on the resources of Oracle for information and credentialing.
- Layer 2: WEMIX is major side-chain hosting games such as MIR4
Consensus Mechanism:
Chain Analysis:
KLAY Token:
Klaytn coin trades under the ticker KLAY, and is bought and sold across a variety of exchanges including:
- Binance
- Bittrex
- KuCoin
- Huobi Global
- LBank
- OKX
- CoinEX
- GoPax
The price as of October 5, 2022, is around the .188 cents price point, down over 80% year over year according to the chart from Coinmarketcap:
Number of people watching Klaytn about other chains, which provides us with an indirect representation of its popularity within the industry:
- Ethereum: 2,935,000
- BNB: 1,789,000
- Polygon: 1,298,000
- TRON: 829,000
- Near: 545,000
- Avalanche: 878,000
- Algorand: 592,000
- Theta: 478,000
- EOS: 391,000
- Tezos: 384,000
- Flow: 193,000
- Waves: 181,000
- Wax: 162,000
- Klaytn: 102,000
- Hive: 49,000
- Steem: 40,000
- https://coinmarketcap.com/ (09/27/22)
Competitive Analysis:
The metaverse continues to be a focal point for development across major corporations like Meta and is a growing industry worldwide. Katlyn has a metaverse-specific SDK making it easier to build and onboard metaverse businesses. Klaytn continues to promote itself as a blockchain designed for metaverse application development but faces stiff competition from many other companies operating in this sector.
As you can see, there are dozens of competing blockchains in the metaverse sector which Klaytn has established as their key development area. Klaytn has also won over prominent names like Defi Kingdoms over their chain from Harmony. Some focus areas that make Klaytn a leader in this sector are their focus on metaverse development and the provision of development tools for budding startups. As mentioned earlier, there are a variety of areas that Klaytn focuses on:
- Gaming
- Domain Name Management
- Music and Entertainment
- Real Estate
- DeFi NFTs
- Fashion and Wearables
- Certification and Academic Credentials
- Concerts and Ticketing
- Sports NFTs
- Supply Chain Management
- Metaverse
Key Performance Indicators:
One way to monitor the performance of a blockchain is to evaluate the number of projects, tokens, and transactions on the blockchain. To do this, we can use the blockchain explorer Klaytnscope.
There are 153 NFT projects on the Klaytn blockchain, giving a performance indicator concerning competitors like Ethereum, Solana, Flow, and other blockchains with similar features. Compared to Ethereum, the leading cryptocurrency for Dapp production and has 1000s of NFT projects, Klaytn appears to be much smaller in size based on the development profile. That said, Klaytn does offer some indicators that other blockchains do not. For example, staking tokens is one of the beneficial features of Klaytn, where holders can stake tokens and earn interest based on the size of their stake.
There are a total of 441 fungible token projects built on the Klaytn blockchain:
These tokens are Ethereum bridge tokens using an Ethereum Virtual Machine, as indicated by the contract addresses. Starting with the 0x characters indicates an Ethereum-based pass. Four hundred forty-one token projects are a good indicator of how the blockchain is growing and being used. While still far away from the 1000s of projects housed on Ethereum, Klaytn is growing and has more affordable gas fees than some competitors.
Figure 1 - Total Value Locked (API called through Defi Llama endpoint)
Klaytn Games:
One of the only chains with major AAA game studies building games on-chain, Nino-Kini, and MIR4, with both integrations being far more seamless than other blockchain-developed games. Another evaluation area is the number of users playing games built on the Klaytn blockchain. Klaytn has also created partnerships with the most prominent esports team in Latin America, loud, investing in their guilds. We can see the developments in this area from the Dappradar.com site, which houses all the information on blockchains that support gaming. While there are a handful of gaming developments on Klaytn, the user base is low, indicating that the number of users on Klaytn is not as high as other blockchains, making it less competitive because of a lack of user base.:
Bridging:
Klaytn offers developers various unique development opportunities, including the native KIP protocol. Their business model is well-adapted to scale to companies looking to advance their position within the metaverse, particularly relating to their ability to bridge Ethereum projects using the ERC20 protocol, as well as their native KIP protocol, which allows for native developments on Klaytn. Some of the assets that can be bridged:
https://scope.klaytn.com/bridge
Key Takeaways:
Evaluation and Concluding Remarks:
While Klaytn has done an excellent job at providing a variety of use cases for its blockchain, they are struggling to compete with other blockchains that are more established and have a higher user base. Their head of global strategy highlight that their developer community seems to be lackluster as most of their developers are centralized in Korea, but they are rolling out many more hackathons abroad. Some reasons for the lack of uptake on the Klaytn blockchain are the lack of high-paying programs to incentivize developers, such as grants or investment funding, which many competitors offer. Klaytn has continued to converse with partners to evolve blockchain games away from play-to-earn to other models: stake-to-earn or compete-to-earn. However, as blockchain development becomes more mainstream, Klaytn will likely grow its user base both on the project development side and the investor side because of its wide variety of use cases. Klatyn is one of the only active and native layer-1s in Asia, becoming more critical as Asia is the largest swath of liquidity outside of the US including a recent partnership with Chinese (BSN) blockchain network. Having positioned itself as a solid blockchain offering a wide variety of options specializing in GameFi and NFTs, it does have the potential to scale and grow if it steps up its outreach and marketing services and spreads to the rest of Asia swiftly. For instance, many businesses could take advantage of the services offered by Klaytn, but in the sea of blockchains, many enterprises are unaware of Klaytn. They will likely improve their position within the competitive landscape increased adoption within Asia, continued improvement on-chain, and better marketing.
Hi 👋 I’m Arjun!
I’m a student at Georgia Tech and I am passionate about web3 tech, investing, and crypto.
I am a final-year student at Georgia Institute of Technology, concentrating on Finance with a minor in Computer Science. Besides my coursework, I have also completed prior internships at a digital asset hedge fund, pure crypto-vc.
Check out my latest Research!
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Just kidding. Nothing was actually shutdown. It wouldn't have been a good idea. Do it again?
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