Klaytn KLAY +26.29% a Layer 1 blockchain network backed by South Korean internet giant Kakao, and Finschia, a major blockchain in Japan developed by messaging conglomerate LINE, have proposed merging the two blockchains – a move it claims could potentially create the largest Web3 ecosystem of Asia could create.
Klaytn Foundation and Finschia Foundation said in a joint statement today that they plan to form a new blockchain that supports both EVM and CosmWasm frameworks. The two foundations will also merge into one organization if the proposal is approved.
The pair noted that the new mainnet will inherit Klaytn’s integration with KakaoTalk and Finschia’s integration with LINE, which serves a user base of more than 250 million digital wallets with more than 420 decentralized apps, according to the statement. Kakao and LINE are both prominent messaging platforms in Asia.
“With access to every Kakaotalk and LINE user, the new public blockchain will also act as a springboard for Asia’s IT and entertainment companies,” the companies said.
The vote on the possible merger will take place from January 26 to February 2.
The potential for a new token
The companies also proposed a new token to replace the existing KLAY and FNSA +23.73% , the native coins of the combined blockchains. Holders of both coins can exchange the new coin upon issuance, the statement said.
Following the announcement of the possible merger, KLAY’s price rose 31.8% in the past 24 hours to $0.25 at 2:20 PM Hong Kong time, according to The Block figures. price page. FNSA climbed 22.6% to trade at $34.74 facts showed.
“Based on the combined experience of both foundations, the proposed tokenomics for this new indigenous currency will have a strong focus on delivering sustainable value creation,” the companies said. “This will be achieved through lower base inflation and a three-tiered burn model designed to drive the currency towards deflation as network activity increases.”
The foundations explained that they plan to burn 24% of new coins issued to “implement Zero Reserve Tokenomics.”
“We are excited to take the first step toward unlocking the tremendous synergy of merging the public blockchains started by Kakao and LINE, both leading IT companies in Asia,” the foundations said.