LINE’s Token Economy
Line is Japan’s most popular instant messaging application. It is also widely used in South Korea, Taiwan, and Thailand. Line’s messaging services are comparable to WhatsApp and Telegram. Line has over 200 million active users globally, 70 million of which are in Japan. Of the Japanese users, 30 million regularly use Line Pay, the company’s mobile payment service.
Line recently announced that it will launch a token-powered ecosystem by the end of 2019.
LINE’s Blockchain: The Link Chain Network
Earlier this year, Line became the first publicly-traded company to launch its own proprietary blockchain, known as the ‘Link Chain Network.’ The Link Chain Network uses the Delegated Proof of Stake consensus mechanism.
Link Token and Link Point
The Link Chain Network supports its own crypto tokens. At launch, it included a standardized token known as the ‘Link Token.’ Recently, Line released its second standardized token, the ‘Link Point,’ exclusively to its Japanese users. Both of these tokens can be used to transact on Line’s existing ecosystem.
Line is issuing one billion Link Point and Link Tokens. 200 million will be held in reserve by Line and 800 million will be distributed within the ecosystem over several years. To distribute tokens, Line decided not to conduct an ICO, and chose instead to distribute tokens as rewards to users when they interact with dApps on the ecosystem.
The BITBOX Exchange
Line also recently launched its own cryptocurrency exchange (BITBOX) for 30 major cryptocurrencies. BITBOX is not available to customers in Japan because Line has not yet secured an operating license from Japan’s Financial Services Agency. It is also not available in the United States for regulatory reasons. Link Point tokens cannot be traded on BITBOX.
So, Link Tokens are currently only useful for transacting on Line’s ecosystem. Line is exploring possible ways of integrating the Link Token with the mainstream Line Pay service to improve user experience and to promote use of the Link Token.
DAPPs
To move its blockchain efforts forward, Line is now seeking to develop and promote dApps on the Link Chain Network. Additionally, it is encouraging developers to use its blockchain as a service platform to develop and deploy dApps on the platform.
Line recently announced the release of the following five dApps:
- Wizball — for Q&A
- 4Cast — for prediction
3. Pasha — for product reviews
4. Tapas — for restaurant and food reviews
5. Step — for location reviews
Scalability Through Leaf Chains
Scalability has been a major issue facing most major blockchain platforms, including Bitcoin and Ethereum. Recent blockchain platforms such as EOS have advertised scalability as one of their defining advantages over Ethereum. Blockchain platforms have addressed the scalability problem in various ways, including through sidechains and state channels.
Line plans to tackle scalability by using what it calls ‘leaf chains,’ which are essentially sidechains. The idea is that each dApp could exist on a separate but interoperable leaf chain. So, while smart contracts can be executed and tokens exchanged in the same way across the Link Chain Network, a large number of transactions on one dApp in a short period of time would not slow down the whole network.
Unblock Ventures
Line has launched Unblock Ventures, a token venture fund, in Hong Kong to “boost the development and adoption of cryptocurrency and blockchain technology.” Though Line initially capitalized Unblock Ventures with USD 10 million, it is likely to increase the amount of the fund in the future.
Conclusion
Blockchain continues to go mainstream in industries beyond cryptocurrencies in 2018. Among instant messaging platforms, Telegram was an early mover. Line’s entrance into the blockchain space is a continuation of this trend.
However, other major messaging platforms have been less ambitious on the blockchain. WeChat (China’s popular messaging, social media, and mobile payment app) blocked several blockchain-related accounts earlier this year, and Facebook cracked down on cryptocurrency advertising. Though there are rumors that Facebook may be developing blockchain capabilities for its users, it has been the subject of political and consumer wrath recently, and can therefore be expected to move slowly and cautiously on any new blockchain initiative.
Line’s Link Chain Network is an exciting new application of blockchain technology on a massive platform. Perhaps even more significantly, Line is just getting started in this space. If Line successfully integrates blockchain to provide financial solutions for its users, it has indicated that it will explore similar applications in emerging countries with inadequate financial systems, to help citizens pay bills and enter transactions easily and securely.
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