The native utility token of a South Korean Ethereum (ETH) rival is rallying after news of a new blockchain merger proposal.
Layer-2 smart contract platform Klaytn (KLAY) leaped from a 24-hour-low of $0.189 to a high of $0.262, a 39% gain, following the announced proposal of a merger to create “Asia’s leading blockchain system.”
KLAY has since stabilized and consolidated, trading for $0.219 at time of writing, still up nearly 17% in the last 24 hours.
Klaytn is a public blockchain platform aiming to provide a user-friendly interface and experience. Klaytn is owned by South Korean internet and mobile provider Kakao. KLAY is the native token and medium of exchange within Klaytn’s blockchain ecosystem, used to pay transaction fees and staking.
Earlier today, Klaytn and Finschia, an independent non-profit aimed at expanding Web3 and blockchain technologies, announced a joint proposal to merge blockchains.
“Klaytn Foundation, established to build and decentralize the ecosystem of South Korea’s leading Layer 1 blockchain Klaytn, has teamed up with Finschia Foundation, the operator of the Finschia blockchain developed by LINE Tech Plus, to propose the merger of the two existing blockchains into a new mainnet. The two blockchain foundations will submit the integration proposal to their respective governance members today to open up the proposal for discussion, and voting will take place from 26 January to 2 February 2024.”
According to the announcement, the merger will aim to consolidate blockchains and combine the blockchains’ strengths, all while simultaneously creating Asia’s largest blockchain ecosystem.
“The proposal aims to create a new industry leader with a technologically superior blockchain that supports both EVM (Ethereum Virtual Machine) and CosmWasm, as well as one of the largest ecosystems of DApps (decentralized applications) and users in Asia. The two foundations will also merge into one organization, combining their technology, services, and business networks which include Kakao, LINE, and many other strategic partners.”
According to the proposal, holders of Klaytn and Finschia’s native tokens, KLAY and FNSA, will be able to swap out their old tokens for new native tokens once they are issued.
“Drawing on the combined experience of both foundations, the proposed tokenomics for this new native coin will focus heavily on delivering sustainable value creation. This will be achieved via a lower base inflation rate and a three-layer burning model designed to drive the coin towards deflation as network activity increases.”
The proposed merger also promises to enhance the blockchain’s level of decentralization, modes of governance, and interoperability with other blockchains.
“We are excited to be taking the first step toward unlocking the enormous synergy of merging the public blockchains started by Kakao and LINE, which are both leading IT companies in Asia. We will give our best to make this merge an opportunity to innovate and lead the Asian blockchain industry in both technology and adoption.”
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