Finschia and Klaytn, two L1 companies backed by Internet giants in Japan and South Korea, announced that they will merge. What is the reason behind this? Maybe the answer lies in history!

📍Key topics in this article: Backdoor listing, speculation in the new rather than speculation in the old, and weakening of historical hold-ups (classic, worth reading)

-Project introduction and similarities

  1. Klaytn is an EVM-compatible L1 expanded as a main chain + sub-chain structure. It can almost be said to be the most well-known infrastructure project in South Korea;

  2. Finschia is a consortium chain based on the COSMOS framework (i.e. L1 with a low degree of decentralization).

The two have a lot in common:

  • They are all backed by Internet giants in their respective regions;

  • The token economy distribution ratio is the same;

  • The trend of the project is also similar to the historical trend.

-Token Economic Analysis

An interesting coincidence is that the token allocation ratio of $KLAY and FNSA are the same. This kind of minimalist allocation is rare. The two projects are combined with the same minimalist allocation. It is estimated that this is the case for the entire Web3;

And the proportion that can be divided into communities is actually about the same. Of course, this may be related to its overall attributes (weak decentralization);

Based on the latest approval: After the two projects merge, 24% of existing tokens will be burned and the unissued supply will cease to be issued.

Moreover, both are Internet giants and have social businesses. However, in the merger declaration, they did not mention the resource investment in the social sector. On the contrary, RWA is a more focused area.

However, Japan and South Korea, as relatively crypto-friendly countries in Asia, have this macro fundamental support🔺

-Competitive product situation🔻

Of the two, one has COSMOS elements and the other is EVM compatible. The combination of the two is a very simple 1+1 at this level, and it becomes the COSMOS framework L1 that is compatible with EVM.

And coincidentally, in the current COSMOS ecosystem, there happens to be such a project: EVMOS

At present, the market value of the three is comparable, and the difference is not particularly exaggerated. In the case of year-on-year destruction + mapping into new tokens, whether the effect of 1+1>2 will appear, I think it is highly likely. Even in the worst case, it will return to the market value baseline based on EVMOS.

-What is the purpose of the merger?

1. They claim to want to build the largest crypto economy in Asia. Judging from the basic situation of the two, it is not a stretch to say this. Finschia is not well-known, but Klaytn is different. It is a hot topic in Korean infrastructure and has a good reputation in the local area.

  • In fact, I was very sad when I wrote this paragraph. I thought that we also had the grand occasion of [domestic public chain] back then, but now, alas~

2. As for why the two should be merged?

It can be seen that Finschia's tokens are not listed on any exchanges, at least not many compared to Klaytn. If the exchange is open by then: where will KLAY go? Where does FNSN go from here? Should exchanges support this kind of exchange?

When these three questions are thrown out, does it feel like [backdoor listing]~🔺

So, by the same token, does the FNSN token have certain arbitrage opportunities? After all, they still have to destroy something, but everyone can judge for themselves in this regard, I am just throwing out objective facts.

🔻On this basis, let’s look at the historical trends of the two

The trends of these two tokens have gone through a similar cycle in the past, and followed a similar trend. From the trend, we can see how big the hold-up market is above. Just imagine how this pattern will rise in the future. That will definitely be difficult! So~

What effect can the two tokens be exchanged for? Simple summary: Eliminate the original user's reference point dependence, weaken the historical lock-in traces and the impact on the future 🔺

What is a reference point dependency? That is, when we hold the target, we are easily affected by historical trends. For example, if I bought Polkadot for 50 dollars, I don’t want to sell it for less than 30 dollars (just an example)

But if you switch to a new token, this historical reference point will be weakened. At the same time: the market always speculates on new things rather than old ones, and a new project is always more likely to attract funds than an old project.

And they have to be destroyed, so the holders are more confused about the original value and future value.

I saw a very interesting saying today: The memory of leeks is only 6 seconds.

This is the case when it has not been deliberately forgotten. Now everyone is rushing in one after another, and I think this method of token merger and replacement is a deliberate weakening method used by the dog dealers in the new cycle.

In conclusion, this article is not FUD, but an analysis of the intentions behind the following events, as well as: Is there an arbitrage opportunity in this case? Can the ecosystem be ambushed in advance? The answer to this question is left to those who know more about this aspect.