Learning Klaytn — A short introduction to Klaytn
Dear Klaytneers,
We’re happy to see our Growth Campaign managed to attract a large number of users interested in the Klaytn blockchain and its ecosystem! In order to provide newcomers with a quick and easy way to get to know Klaytn, we’re launching a new “Learning Klaytn” series of articles we hope you’ll enjoy and share with your friends!
So, what is Klaytn?
Klaytn is a service-centric blockchain platform being developed by GroundX, the blockchain arm of Kakao, the company behind KakaoTalk, one of the most popular messaging apps in South Asia, with more than 50 million active users.
Klaynt’s mainnet, Cypress, is already live and running, and boasts as much as 4,000 transactions per second (TPS). Transactions on the network have immediate finality and a new block is generated each second. Network security is being handled by up to 50 consensus nodes.
The network also runs EVM (Ethereum Virtual Machine) and supports the execution of Solidity contracts, but ,unlike Ethereum, operates on a fixed gas price.
PoW or PoS?
The majority of blockchains today operate on one of the aforementioned consensus mechanism - proof of work (PoW) has miners searching for the next block, while in proof of stake (PoS), holders of enough native currency are granted operation of the network as they stand to lose the most should they verify invalid transactions.
As both approaches contain a possibility of a “fork” in the chain (i.e. a number of block producers not agreeing with each other) which creates transaction finality uncertainty. As long as the transaction isn’t 100% verified, it could create delays and issues in the user experience and lower the quality of services rendered. In order to account for this, GroundX decided to add an optimised version of Istanbul Byzantine Fault Tolerance to its consensus mechanism, making the finality of transactions instantaneous and enabling the high performances of the network we’ve already mentioned.
Lately, proof of stake blockchains have become associated with users staking their funds for block rewards, but this is currently not possible of the Klaytn network - all node operators have so far been appointed by Klaytn and are mostly large enterprises instead of single users or pools, but that doesn’t mean this can’t change in the future.
What about scaling?
Scaling has become a hot topic in blockchain development over the last couple of years. As more and more users flock to the network, its quite possible it becomes congested - we’ve already seen this happen to Bitcoin and Ethereum network. Hence developers started looking at ways to scale the blockchain and facilitate a bigger number of users.
Klaytn uses service chains — you can think of them as auxiliary blockchains, independent from the main chain, catering to specific BApp demands such as special node configurations, customized security levels, or exceptionally high throughput.
Some projects opted for using completely decentralized scaling solutions, but their development has shown a number of obstacles in implementation as well as impact to the speed and finality of the transactions. Hence GroundX once again decided to follow its goal of providing instant transaction finality, speed and reliability. Additionally, running separate chains means that a service chain could be configured according to the user’s wishes, making for a more flexible and rounded final product.
But I thought this is crypto?
Yes, of course there is a cryptocurrency involved. KLAY is the native currency of the Klaytn ecosystem, with one peb being the currency’s smallest increment (e.g. what one satoshi is for BTC).
Its being used both to execute smart contracts and pay transaction fees on the network. The team thus described it as an incentive - for the devs to create a clean efficient code (which will cost less to run) and for the consensus nodes to keep securing the network and benefit from block rewards.
Being smart-contract enabled also means that token creation is possible on the Klay network.
These tokens can either be fungible (KIP-7) or non-fungible (KIP-17), reminiscent of ETH’s ERC-20 fungible and ERC-721 and ERC-1155 non-fungible tokens.
The initial number of KLAY minted is 10 billion KLAY, with 9.6KLAY minted every block, which comes to about 302 million KLAY minted each year, or a 3,02% annual inflation rate. Now, this may sound like a lot of KLAY, but the current BTC inflation rate is about 3,5% and ETH’s maximum annual issuance would see supply increase by 16% considering its currently circulating supply.
The newly minted KLAY is distributed as follow:
- Klaytn Governance Council Reward: 34%
- Proof of Contribution (PoC): 54%
- Klaytn Improvement Reserve (KIR): 12%
Governance Council you say?
Yes, Klaytn is run by the Klaytn Governance Council. It comprises multinational companies which operate the Klaytn consensus node network, charged with maintaining the security of its blockchain network. The reported combined worth of these companies was estimated at over $59 billion. Since a picture is worth a thousand words, here’s one for you:
The fact the mainnet launched with 18 of these hot-shots and now has 26 nodes running is a clear enough indicator of the speed at which this project wants to move forward.
What about other partnerships?
Besides those sitting on the Klaytn Governance Council, the project collaborates with a number of larger and smaller companies and projects, divided into four groups - Ecosystem Partners, Initial Service Partners, KLAY BApp Partners and Investors.
Ecosystem Partners are partners with existing extensive user networks which can help Klaytn reach numerous service providers. Some of the bigger names include Samsung Blockchain, Shinhan Bank, OKEx, Upbit and many others.
Initial Service Partners are partners running companies at the top of their respective fields which will help Klaytn drive mainstream adoption and include a large number of blockchain companies such as Cosmochain, Airbloc Protocol, Atlas, Carry Protocol and many others.
KLAY BApp Partners are enterprise partners that have recognized Klaytn’s vision and decided to utilize KLAY to facilitate rewards and payments in their apps. Among these are several popular games developed by South Korea’s leading game studios such as MGAME and Biscuit.
Investors are of course those partners that recognized Klaytn’t vision early on and helped GroundX raise funds for their project. These include Kakao Investment, CollinStar Capital, Anchor Equity Partners, Crescendo Equity Partners and many more
For a full list of Klaytn’s extensive partnerships and more details on each, check out https://www.klaytn.com/partners
A bit of pondering..
Lets spend a couple of minutes considering what we’ve covered here. In order to do so, one of the most important things is the overall goal of Klaytn - achieving mass adoption. This guiding thought can be seen in all three areas we’ve briefly touched upon in this intro.
While other blockchains set out to re-invent the wheel, GroundX recognized the importance of implementing battle-tested solutions, while adapting them to meet their needs. The result is a fast, secure and scalable blockchain solution that is compatible with existing programming languages developers are used to working in - but allows them and enterprises to deploy their solutions at a fraction of a cost.
The Klaytn Governing Council managed to put together some of the biggest tech companies in South Asia and the world and they plan to utilize their access to existing markets and user bases to accelerate mass adoption and growth of the ecosystem surrounding Klaytn. Their extensive network of partners and investors will help facilitate mainstream adoption by providing tailor-made solutions best suited for the partners' existing user bases.
From the crypto side of things, Klaytn’s potential has been recognized by several prominent cryptocurrency exchanges that sit on its governing council or have managed to list the native cryptocurrency of the network, KLAY.
At the moment, KLAY can be traded on Liquid, Upbit Indonesia and Upbit Singapore and we’re happy to announce its been added to Hoo as well.
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