Tiger Research: Is South Korea still a strategic hub for blockchain mainnets?

Authors: Leo Park & Yoon Lee, Tiger Research

Compiled by: Deep Tide TechFlow

Key Takeaways:

• Global mainnets that entered the South Korean market early remain very active, especially in the gaming sector, showcasing strong competitiveness around entertainment IP.

• This year, mainnet projects like Arbitrum, Monad, Story, and Scroll have rapidly expanded their influence in South Korea. Each project has adopted unique strategies focusing on community building, education, and strategic partnerships to grow their ecosystems.

• While the South Korean market is indeed attractive, it is crucial to have a deep understanding of its language, culture, and regulatory environment. Early collaboration with local partners is key to successfully entering and adapting to the market.

1. Introduction

Source: Tiger Research

Since 2022, global blockchain mainnets have actively explored the South Korean market by appointing local representatives and collaborating with Korean companies. Notably, several blockchain networks, including Avalanche, have made significant progress. Avalanche officially announced its entry into the South Korean market in 2021 by appointing a head of business development, and Solana, Polygon, Aptos, and Astar have also achieved important breakthroughs in the South Korean market.

However, with the rapid development of the Web3 industry, some of their strategies have also been adjusted. This report aims to explore whether these mainnets are still focused on the South Korean market and identify if any emerging mainnets have appeared. Through this analysis, we hope to reveal how these mainnets seize opportunities and formulate their strategies in the South Korean market.

2. Current Status of Mainnet Expansion in South Korea

[Current trends of mainnets entering the South Korean market, Tiger Research]

The table contains 3 columns and 20 rows, sorted in ascending order by the "Current Status" column.

2.1. Shift in Focus to Project Introduction

Global blockchain mainnets that entered the South Korean market early are now beginning to show substantial results. These networks are not limited to simple collaborations with Korean companies but are more focused on business development, dedicated to introducing high-quality projects.

Source: Nexpace

For example, Avalanche successfully integrated Nexpace's "MapleStory N" into its subnet, becoming a notable integration case. Additionally, Avalanche further enhanced its ecosystem and expanded its influence in South Korea by incorporating SK Planet's NFT membership platform "Road to Rich."

Source: Arbitrum

In 2023, Arbitrum appointed a Korean representative and established the Arbitrum Korea community to solidify its ecological foundation. The network partnered with Delabs to introduce their Web3 games to Arbitrum and integrated with the metaverse platform Caliverse from the Lotte Group, demonstrating its firm commitment to revitalizing the Korean ecosystem.

Source: Marblex

Immutable is strengthening its collaboration with the Web3 gaming company Marblex, Aptos is introducing Supervillain labs, while Polygon has successfully completed an NFT-based environmental project in collaboration with Starbucks Korea. These cases indicate that blockchain mainnets are not only establishing partnerships but also achieving substantial real-world applications in the South Korean market.

2.2. Waiting for Opportunities or Falling Behind in Competition?

While some mainnets are gradually introducing projects in their respective fields, others appear to be more passive. For instance, since the establishment of the Near Korea center, Near Protocol has not made significant progress beyond establishing partnerships and hosting events. Similarly, most other mainnets remain at a superficial level of collaboration, lacking in-depth interaction. Additionally, networks like Oasys have seen a decline in vitality in the South Korean market, partly due to the departure of key business development personnel.

3. Global Blockchain Mainnets Entering the South Korean Market in 2024

Source: Tiger Research

In 2024, global mainnets continue to showcase their influence in the South Korean market, each with distinctive approaches. These efforts include building strong communities, conducting training activities, organizing various events, and enhancing visibility while seeking ecosystem partners to solidify their market positions. In this chapter, we will explore those mainnets that have recently begun to expand their ecosystems in South Korea and delve into their ongoing activities.

3.1. After All, Web3 Begins with Community

Community is the core of any Web3 project, and this is no exception for mainnets entering the South Korean market.

Source: Arbitrum Korea X

For example, Arbitrum has established a local community in South Korea called Arbitrum Korea to facilitate its expansion in the country. Arbitrum Korea actively collaborates with ambassadors and local partners to enhance its local influence. These ambassadors play a crucial role by translating updates about the Arbitrum ecosystem into Korean and disseminating them across major channels. They have also organized events, such as dialogues on Twitter Spaces with well-known figures in Korea, to boost visibility and engagement in the South Korean market.

Source: Monad Telegram

Additionally, Arbitrum has opened a dedicated Telegram channel for South Korea to share ecosystem news and interact with community members. This channel attracts not only blockchain developers but also investors looking to understand the dynamics of the mainnet. These initiatives aim to overcome language barriers, cultural differences, and the challenges posed by different search engine platforms in various countries, thereby promoting greater participation in the ecosystem.

3.2. Expanding Ecosystems Through Education and Events

There are many different types of blockchain technologies in the Web3 industry, each with distinct structures. While the degree of difference varies, many of them operate in fundamentally different ways due to the architecture of the infrastructure or the programming languages used. This leads to fragmentation in the developer ecosystem, making the overall development of the ecosystem and the process of introducing companies and projects into it challenging.

Source: Near Korea Hub

Global mainnets are increasingly recognizing the importance of education in building a robust blockchain ecosystem. In this context, Near Protocol has established strategic partnerships with 12 blockchain communities in South Korea to promote educational projects and hackathons. Similarly, Arbitrum Korea has collaborated with blockchain communities at Korea University and Yonsei University to host seminars aimed at enhancing students' understanding of Arbitrum technology. These efforts reflect the strategic importance of the South Korean market, transcending its potential as a retail investment market. The emphasis on cultivating and attracting high-quality talent highlights South Korea's core position in the broader blockchain ecosystem. By investing in education and community-building activities, these mainnets are effectively laying the groundwork for ecosystem growth and innovation.

3.3. Ecosystem Partners

Global mainnets are not only focused on training their developers but are also strategically expanding their ecosystems through collaborations with local companies. For example, Monad is collaborating with Neowiz's Intellar X to enhance its influence in the Pacific market, including South Korea. Similarly, Arbitrum has partnered with local Web3 gaming company Delabs to facilitate the introduction of gaming projects, further strengthening its ecosystem. These partnerships showcase a targeted approach to market expansion by leveraging local expertise and industry-specific collaborations.

Source: DappRadar

Thus, mainnets are leveraging strong local partners to expand their markets. Particularly in the South Korean market, they focus on establishing partnerships with promising gaming companies. Additionally, they are expanding their ecosystems by collaborating with local wallet providers and validators. These collaborations help overcome cultural and social barriers, allowing mainnets to enter the market more quickly and effectively.

4. Conclusion

As of 2024, the growth rate of South Korea's Web3 industry has slowed due to the implementation of the Virtual Asset User Protection Act and the stagnation of regulations surrounding Security Token Offerings (STOs). Despite these regulatory challenges, South Korea remains an attractive market due to its significant liquidity and high-quality developer pool. Major mainnets continue to maintain a stable market presence and actively explore various strategies to enter the South Korean market.

4.1. Steps to Successfully Enter the Market

Global mainnets typically enhance their visibility by hiring Korean representatives and hosting events and educational programs. Subsequently, they create actual success stories through collaborations with key local partners based on accumulated market influence. Another key feature is their focus on content-driven projects and collaborations. This seems to be a characteristic of the South Korean market, as it is highly developed in areas such as gaming, comics, novels, and idols.

4.2. Key Points for Successfully Penetrating the South Korean Market

To effectively expand their business in South Korea, most global mainnets typically hire local representatives. However, challenges may arise when these representatives are responsible for broader Asian markets or are not sufficiently familiar with Korean language and culture. The rapid economic development and unique market characteristics of South Korea require representatives to have a deep understanding of local culture and be fluent in Korean.

Furthermore, it is essential to address the ever-changing cryptocurrency regulations and their associated political and social dynamics. To successfully enter and establish a foothold in the market, it is advisable to collaborate early with local partners who are familiar with Korean culture, industry characteristics, and regulatory frameworks.