The Story of Finschia developer, Line Next
Behind the success of the $140M investment
TL;DR
LINE NEXT has raised $140 million in funding from Crescendo Equity Partners and will focus on expanding its global platform business and developing its Web3 technology.
Finschia has established a unique and competitive position in the blockchain market with its technology combined with LINE's powerful business platform, a solid ecosystem built over six years, a user base of hundreds of millions of LINE users, and the ability to produce its own products.
The Finschia Foundation will need to strengthen its partnership with LINE and leverage LINE's strong user base, but also pursue its value as an independent platform to achieve continued growth and expansion in the Web3 market.
On December 13, 2023, LINE NEXT Corporation received an investment of $140 million from Crescendo Equity Partners and its consortium. The investment is the largest of 2023 in the Asian blockchain and Web3 industry and has attracted significant industry attention. The funds will be used to 1) expand its global platform business, 2) develop new services, and 3) develop and support Web3 transition technology to popularize the Finschia chain. In this report, we will analyze the strengths and potential of LINE NEXT, the developer of the Finschia blockchain.
Timeline from LINK chain to Finschia
April 2nd, 2018: Official launch of blockchain subsidiary "Unblock" (business)
April 11th, 2018: Established LINK TECH PLUS, a subsidiary in Singapore (publishing)
May 2nd, 2018: Naver LINE and ICON established a blockchain joint venture 'Unchain' (platform development)
August 31st, 2018: LINK chain goes public
October 16th, 2018: Changed LINK chain's token symbol (LINK) to LN
August 7th, 2020: LINE Blockchain goes public (name change from LINK chain)
December 16th, 2021: LINE NEXT is established in South Korea and the U.S.
February 8th, 2022: Unblock liquidated and related businesses integrated into LINE NEXT
September 14th, 2022: Global NFT platform DOSI launches beta version
December 22nd, 2022: Launch of Finschia, the 3rd generation mainnet (Link)
April 27th, 2023: LINE TECH PLUS established the Finschia Foundation, a non-profit corporation (Link)
May 25th, 2023: LINK (LN) > Finsia (FNSA) coin rebranding, 2nd generation mainnet Daphne-Finsia integration (Link)
LINE's blockchain business has been around for six years since 2018. It started with LINK chain, focusing on rewarding user participation and contributions to LINE's existing products, such as LINE Messenger. However, while other chains were aggressively expanding their public chain business despite the gray zone of regulation, LINK chain's strategy was to adhere to the strict regulations of the Financial Services Agency of Japan. As a result, it faced significant constraints on its business expansion and was unable to achieve significant results.
In response, LINE reorganized its business structure, changing its name from LINK chain to LINE Blockchain in 2020 and then to Finschia in late 2022. In particular, the launch of its third-generation mainnet in 2023 was no longer self-funded but backed by a large-scale investment of $140 million, demonstrating its aggressive expansion and corresponding market expectations.
Finschia is ready to go global
Finschia is backed by a powerful platform called LINE, so its main strengths lie in business-related fields. In terms of technical capabilities, Finschia is based on the Cosmos SDK and uses a proprietary consensus algorithm called “Ostracon.” This speeds up its transactions by over 400x and reduces transaction costs by 98% compared to Ethereum.
However, Finschia's real advantage comes from the robust ecosystem it has built over its six years of operation and the user base of LINE affiliates' own products. The ability to easily target LINE users without additional marketing costs is a very favorable condition for Finschia. Furthermore, LINE affiliates already have the capability to produce their own Web3 products. This has laid a strong foundation for growth. In other words, Finschia's market recognition is not only due to its technology but also to its strategic business operation with a strong business partner like LINE.
1. A well-established ecosystem
The first advantage is a solid ecosystem that has been built over six years of business operations. During this time, Finschia (formerly LINK chain) has built a variety of relationships, including with many blockchain dApp developers, which will benefit Finschia greatly when it completes its transition from a private to a public blockchain. Finschia’s own products have a solid standing. For example, projects like DOSI, a global NFT platform, have already proven their worth in the market, and there is also a DOSI wallet.
2. Hundreds of millions of LINE users
The second advantage is the massive user pool of LINE Messenger. LINE Messenger has hundreds of millions of users, mainly in Asia, which will give Finschia a tremendous advantage when launching new blockchain-based services. These existing users will be able to quickly adapt to the new services offered by Finschia and form the initial market for everyday use of blockchain technology. Embedding Finschia's new services in LINE Messenger and making them available organically could have the same user acquisition effect as it did for KakaoTalk via Klip wallet.
3. Developer capabilities
Finally, Finschia will be able to leverage the strong production capabilities of the LINE-affiliated companies. LINE has already successfully launched a variety of digital services and content, and its experience and expertise will be a great asset to Finschia's product development. For example, LINE's character merchandise, games, and applications are examples of the various blockchain-based services that Finschia can offer.
In fact, Finschia has announced plans to launch a new Web3 game utilizing the Brown & Friends character IP. This ability to produce its own products will be essential to establishing Finschia's unique position in the market and continuing to develop competitive products and services without the need to participate in the fierce competition of grant wars to attract Web3 developers.
Considerations for LINE
Finschia Foundation will need to successfully scale its business after the investment. In order to do so, it will be important to first strengthen the relationship with LINE, which was its initial business strategy. As mentioned above, LINE's global user base can play a crucial role in the widespread adoption and diffusion of Finschia Foundation's blockchain technology and services. However, there are two aspects that the foundation must consider regarding its close relationship with LINE.
First, a close relationship with LINE in terms of technology integration and service collaboration will ensure that the blockchain technology and services offered by Finschia are naturally introduced and adopted by LINE's existing users. If LINE's strong user base quickly adapts to Finschia's new technology and utilizes it in their daily lives, this will mean a swift expansion to a broader user base.
Second, it is important to clearly communicate the "why" of Finschia's blockchain technology and services to LINE users. In some cases, when blockchain is applied to existing products as a reward for user participation, it can potentially harm existing users by attracting malicious users. Making sure that users understand the value blockchain provides and the positive impact it will have on their daily lives is important. This will help users recognize that Finschia's blockchain service is not just a technological mirage, but a tool that can be used in everyday life.
To respond to the rapid changes in the Web3 market, the Finschia Foundation will need to strengthen its partnership with LINE and communicate to LINE users how Finschia's services can enhance their digital experience in a clear and easy-to-understand manner. In addition, it will need to strengthen its role as an open platform by focusing on attracting core dApps like LINE, while building a support system for small and medium-sized dApps to launch their own products using the Finschia Chain.
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