What is Klaytn (KLAY)? How Does This Enterprise Blockchain Network Work?

The crypto industry has only been active for almost a decade but it has attracted a vast majority f people from around the world. Businesses are moving their operations to blockchain networks to avoid the problems of the traditional financial industry.

Building a blockchain is quite a tough job due to which businesses can’t run their operations independently. Fortunately, Klaytn is trying to solve this problem with its unique infrastructure.

What is Klaytn?

Klaytn is a hybrid blockchain network that enables enterprises to build customizable blockchains on its network. A hybrid network is a combination of a private and public blockchain that provides a higher level of scalability and low latency.

With this feature, Klaytn is dedicated to establishing a versatile and user-friendly platform that can facilitate businesses of all sizes. Businesses can take advantage of this blockchain network even if they don’t have a deep understanding of blockchain technology.

The service-oriented blockchains built on the Klaytn network are recognized as service chains. The service chains can be used for any kind of web service including financial services, merchandise, insurance, outsourcing, buying & selling, and more.

Klaytn offers several unique features for global enterprises.

Ease of Deployment

The businesses can easily build service chains or join other chains within the network because Klaytn offers an easy-to-use interface. Klaytn eliminates the need for hiring blockchain specialists and technical experts as businesses can independently launch their own blockchains on this network.

Innovative Consensus

Klaytn uses Istanbul Byzantine Fault Tolerance (IBFT) to address the scalability issue found in most blockchain networks. It’s an ideal choice for enterprises because it has pretty low transaction fees compared to other networks.

Backing

Klaytn has the support of many conglomerates including Union Bank, LG Electronics, and FSN. Thus, businesses can confidently put their trust in this blockchain network. Furthermore, Klaytn has raised investment from popular companies like Humanspace, Wemade Tree, and Netmarble.

Interoperability

As it’s mentioned above, businesses can create decentralized apps for different industries including asset management, DEXs, and game development because Klaytn is a versatile blockchain network.

Klaytn Brief History

Klaytn was launched by Kakao Corporation, a popular South Korean tech giant, in 2019. Kakao is providing services in multiple sectors with different products including KakaoTalk, KakaoBank, Kakao Games, Kakao Taxi, and Kakao T Bike. Kakao decided to create a blockchain network following the 2017 crypto bull run.

Kakao used its blockchain subsidiary, Ground X, for the development of the Klaytn network. Around 40 companies partnered with Klaytn in less than six months after the project’s launch. More than 200 companies from different sectors including healthcare, finance, and entertainment have joined the Klaytn network since its launch.

However, the Klaytn foundation is now focused on supporting businesses that are willing to build, work, and play in the metaverse.

How Does Klaytn Work?

The traditional proof-of-work and proof-of-stake consensus protocols can’t accommodate the needs of Klaytn because it’s a business-oriented blockchain designed to handle huge volumes of data. Therefore, Klaytn uses the Istanbul Byzantine Fault Tolerance (IBFT) consensus mechanism for transaction processing.

Although IBFT is the primary consensus protocol of the Klaytn network, the new validators can use the Proof-of-stake consensus mechanism on a small scale. Klaytn follows Ethereum in most cases. Therefore, it uses a similar virtual machine for smart contract deployment.

But it offers fast transaction speeds as compared to Ethereum because it’s using a different kind of consensus protocol. Therefore, many large-scale businesses are choosing Klaytn instead of Ethereum. Klaytn can process around 4,000 transactions per second whereas Ethereum processes only 12-15 transactions per second.

Furthermore, Klaytn has a fixed unit price which means the users don’t need to pay high gas fees to process their transactions earlier. The system will automatically process the transaction once its time comes.

The interesting part is that the transaction fee on this network is more than 10 times cheaper compared to Ethereum whereas Ethereum’s transaction fee surges when the traffic increases.

The Governance Council

Different multinational businesses and organizations manage activities within the Klaytn network. Any council member can propose changes for the network’s growth and other members vote on these proposals based on their understanding.

The council members are now looking for new ways for the fast development of the project because Klaytn has high growth potential in the crypto space.

Klaytn Improvement Reserve

Klaytn community members are rewarded for their contribution to the network’s growth and enhancement. The Klaytn Improvement Reserve program is specifically designed to reward these participants.

So, whenever a user submits a proposal for adjustment within the platform, community incentive, or other activities, the KIR program rewards them accordingly. Under the KIR program, the network also facilitates developers that are willing to execute smart contract-based applications but don’t have the required funds.

Klay Token Use Cases

Klay is the native token of the Klaytn network that is mainly used for the transfer of value. The developers can also use it as a payment option or fee collection. With a circulating supply of 2.86 billion tokens, Klay has a market cap of around $729 million. It ranks among the 50 best cryptocurrencies in terms of market cap.

Conclusion

Klaytn is a hybrid blockchain network designed for businesses that are focused on building their own blockchain networks. It offers an easy-to-use interface making it easier for businesses to build customizable blockchains even if they don’t deep technical knowledge.

Klaytn is now focused on serving enterprises that are dedicated to building and working in the metaverse. If you need more information about how Klaytn works, feel free to get in touch with us.