Klaytn (KLAY) is a BFT-based public blockchain with immediate transaction finality and high throughput. Klaytn bills itself as “the metaverse blockchain for all”. Its mainnet has a one-second block generation and confirmation time and can process around 12,000 transactions per second experimentally with a few nodes.
Klaytn launched its Cypress mainnet in June 2019 and boasts a gas price that is lower than that of Ethereum. It is an Ethereum-equivalent layer-one blockchain with more than 250 different dApps running on top of it. Some big names that have entered strategic partnerships with Klaytn include Netmarble, GMO Internet Group, and ConsenSys.
Launched by South Korean company Kakao, one of South Korea’s leading software enterprises, Klaytn is an open-source, public blockchain positioning itself as the default solution for metaverse-based applications, thanks to its enterprise-grade performance. It aims to provide all the tools for builders to build the decentralized metaverse, such as:
In-built layer-two solutions
Software development kits
Wallets
Oracles
Chain explorers
Bridges
DAOs
NFT marketplaces
Klaytn is primed for global expansion with the announcement of more strategic deals as part of its Klaytn 2.0 roadmap. The platform is working with Parity Technologies to build a substrate-based Klaytn chain, Klaytn-Substrate. It will also be establishing an Open Permissioned Blockchain, the Chongqing Chain, on the Blockchain-based Service Network (BSN).
Klaytn 2.0 will also see more developer tools being supported on the network. Chainlink and Witnet have signed partnerships with Klaytn to integrate their oracle services. Wormhole Bridge will also soon join the network as a major step in improving interoperability.
The Klaytn ecosystem also provides financial and operational support to applications in the form of investment funds, performance incentives, treasury advisory, and community building. The combination of a comprehensive development package, a high-performing mainnet, community building, and financial support has helped Klaytn to set several impressive growth milestones. The network currently boasts a TVL of over $500 million and is one of only four blockchains linked to OpenSea, the leading NFT marketplace.
How Does Klaytn Work?
Klaytn prides itself on its 4,000 transactions per second throughput and its one-second transaction finality. It works with an optimized Istanbul Byzantine Fault Tolerance (pBFT) consensus mechanism. In practice, this means there are three types of nodes in Klaytn:
Consensus Nodes
Proxy Nodes
Endpoint Nodes
Consensus Nodes produce blocks in the Klaytn network. Proxy Nodes transmit transaction requests from Endpoint Nodes to Consensus Nodes. Endpoint Nodes process data to and from the Klaytn service chains. This creates a tiered network structure, where the workload is distributed across Klaytn’s service chains while consensus nodes maintain the network’s security.
Another key aspect of the Klaytn ecosystem is its equivalence with Ethereum. Since Klaytn is an Ethereum-equivalent chain, all Ethereum tools run seamlessly within the Klaytn ecosystem, making the technical stacks of the two chains equivalent. Therefore, Ethereum Improvement Proposals can be carried over to Klaytn and vice versa. As such, core development efforts for any one of the two chains will benefit both.
Furthermore, Klaytn offers a unique governance structure that has opened doors for decentralized entities to the Klaytn Governance Council. The network follows a staking-based governance model and aims for decentralization by evolving into a DAO of DAOs. Consequently, its ecosystem fund will be run in a completely decentralized manner. Klaytn is running the Klaytn Improvement Reserve and the Klaytn Growth Fund Grant Programs, which contribute to supporting infrastructure and tools for the blockchain. It also has a Klaytn Growth Fund Investment Program investing in early-stage projects.
Unique Features of Klaytn
Klaytn clearly stresses its unique competitive advantages:
Metaverse Package
Klaytn offers a comprehensive package of tools and financial and managerial support for metaverse projects to flourish. That makes the blockchain a prime candidate for metaverse-oriented builders.
Fast Transaction Finality
Thanks to its one-second deterministic finality, transactions on Klaytn are settled quickly and irreversibly. Needless to say that this is a massive factor when creating a consumer-friendly user experience.
Ethereum Equivalence
With its Ethereum equivalence, Klaytn complements the Ethereum ecosystem while simultaneously playing to its own strengths. Metaverse-based projects that have a hard time working on Ethereum due to its technical limitations can build on Klaytn with the same tech stack, thereby smoothing the onboarding process for innovative teams.
Decentralized Governance
Its unique governance structure with DAOs, builders and enterprises delivers decentralization and stability and makes Klaytn an interesting prospect for DAOs.
Ecosystem Fund
A generous $1 billion fund to support teams with grants, investments and incentive schemes guarantees that the future of the Klaytn ecosystem will be growth-oriented.
Klaytn Tokenomics
The total supply of KLAY is 10.7 billion, with a circulating supply of 2.84 billion KLAY. Klaytn mints 9.6 KLAY per new block, which amounts to 300 million KLAY entering the circulation annually. Therefore, Klaytn’s inflation rate is 3% per annum. Klaytn allocates a generous 66% of its total emissions towards the development of its ecosystem. The block rewards are distributed as follows:
Klaytn Governance Council Reward: 34%
Klaytn Growth Fund (KGF): 54%
Klaytn Improvement Reserve (KIR): 12%
KLAY is a governance token, and to enter the Klaytn Governance Council, validators must stake at least 5 million KLAY. Council members are confirmed every 86,400 blocks and can have their stake slashed in case of misbehavior.
