In the global digital transformation process, the wave of cryptocurrency is unstoppable. Its underlying distributed ledger technology is deeply reshaping industries such as finance, logistics, and entertainment while subtly changing the attitudes of regulatory bodies worldwide towards the crypto industry. Initially skeptical, regulators are gradually shifting towards openness and inclusivity. However, with no clear global regulatory consensus yet formed, compliance remains the ultimate issue hanging over industry participants.

The advantages of Japan Open Chain are evident at this moment. As a public blockchain from Japan, it operates entirely by Japanese laws and regulations, promoting the development of stablecoins through partnerships with Japanese banks. At the same time, JOC adopts the Proof of Authority (PoA) consensus algorithm, with validator nodes strictly limited to trusted Japanese entities.

This article will delve into Japan Open Chain (JOC), exploring its team background, technological features, stablecoin business, ecosystem development, and token economics to present its future development potential and challenges.

What is Japan Open Chain?

Japan Open Chain (JOC) is a Layer 1 blockchain operated by a Japanese company, fully compatible with Ethereum and using the Proof of Authority (PoA) consensus algorithm. JOC operates on a consortium of permissioned nodes, currently with 16 validators, including CORGEAR Co.Ltd. (a subsidiary of Sony Group), Dentsu Inc., NTT Group subsidiaries, and Kyoto University of the Arts.

Validators of JOC (source: jbfd.org)

Compliance is a key advantage of JOC, as Japanese entities create it and strictly operates in accordance with Japanese laws. Currently, JOC is actively promoting the issuance and circulation of stablecoins, working with local Japanese banks such as Minna no Bank and The Shikoku Bank to build the next-generation financial system. In addition to compliance efforts, the team is also actively expanding globally, engaging in in-depth discussions with various Web3 project teams to build a more diverse ecosystem and enhance user experience.

The native token of Japan Open Chain is $JOC, with a total supply of 1 billion, officially launched and circulating on December 23, 2024. The primary use of $JOC is as the transaction currency for the chain, used to pay various gas fees such as token transfers and NFT issuance, with further use cases expected to be developed in the future.

Team Background and Funding

G.U Group, headquartered in Shibuya, Tokyo, developed Japan Open Chain. G.U Group is a consortium of multiple companies, including the Japan Blockchain Foundation Co., Ltd., responsible for JOC’s operation and management, and GU Technologies Co., Ltd., which focuses on stablecoins, NFTs, and blockchain solutions.

G.U Group was established in 2018, and the only publicly disclosed funding is an investment of $2.9 million from the Japanese venture capital firm B Dash Ventures, received in December 2023.

As for JOC itself, it received strategic investment in September 2024 from the cross-chain project Bifrost, under the blockchain technology company PhiloLab Technology. The exact investment amount was not disclosed, but the collaboration aims to enhance JOC’s interoperability and facilitate the deployment and adoption of JOC ecosystem applications.

JOC’s founders are Hidekazu Kondo and Hiroaki Inaba. Hidekazu Kondo previously worked at Sony and founded the web browser company Lunascape Inc. Due to his outstanding achievements, he was named “Asia’s Best Young Entrepreneur” and one of “100 People Revitalizing Japan.” Hiroaki Inaba, on the other hand, has extensive experience in corporate banking.

JOC Three Core Features

1) Based on Proof of Authority Mechanism, Compatible with Ethereum

Japan Open Chain is fully compatible with Ethereum, meaning any tools and smart contracts developed on the Ethereum protocol can seamlessly adapt, significantly lowering the entry barriers for developers.

However, JOC does not adopt the Proof of Stake mechanism used by the Ethereum mainnet; instead, it opts for the Proof of Authority algorithm. Given the relatively small number of validator nodes, this sacrifices a degree of decentralization but greatly improves transaction speed and scalability. While the Ethereum mainnet can handle tens of transactions per second (TPS), JOC’s TPS can reach thousands.

Additionally, because the identities of the validator nodes in Proof of Authority are public and highly trusted, it enhances network security, facilitates network upgrades and protocol improvements, and is more suitable for enterprise-level applications that require high trust, such as JOC’s stablecoin issuance and circulation business in collaboration with Japanese banks.

2) Fully Compliant, Trusted Nodes

Japan Open Chain is built using Go Ethereum (Geth), a widely used Ethereum open-source node software. Currently, JOC has 16 nodes, all operated by well-known Japanese entities, primarily leading publicly listed companies, such as CORGEAR Co.Ltd. (a subsidiary of Sony Group), Dentsu Inc., NTT Communications (a subsidiary of NTT Group), G.U. Technologies Inc., Minna Bank, extra mile Inc. (a subsidiary of Asahi Television Group), Kyoto University of the Arts, and CAC Corporation. The operational status of the nodes will be regularly audited.

JOC Framework (Source: japanopenchain.org)

According to the team, JOC currently restricts node operators to highly trusted Japanese companies. To ensure the diversity of validators, the number of validators will be increased to over 100 in the future, and cryptocurrency companies will also be allowed to join.

The JOC team values compliance. In addition to strictly adhering to Japanese laws for blockchain operations, the native token issuance and sales have also passed the review of Japan’s Financial Services Agency (FSA). Furthermore, any company or individual wishing to provide services on the JOC blockchain must comply with its relevant regulations and terms.

3) Focused on Stablecoin Business, Building the Next-Generation Financial System

In recent years, stablecoins have played a key role in facilitating cross-border payments, financial innovation, and enhancing market liquidity. Their huge development potential has drawn the attention of governments worldwide, including Japan. Therefore, in June 2023, the Japanese authorities amended the Payment Services Act to recognize stablecoins as legal payment and remittance methods officially.

Japan Open Chain quickly seized this opportunity, actively collaborating with several domestic banks, such as Minna no Bank, The Shikoku Bank, Orix Bank, and Aozora Bank, to provide infrastructure for the issuance of stablecoins denominated in yen and foreign currencies. This aims to enable high-speed remittances and transaction fees below 1 yen, reshaping the traditional financial system. The team reportedly conducts proof-of-concept experiments on JOC, with plans for a full-scale production launch.

Ecosystem Development and Supporting Resources

The vision of the Japan Open Chain team is to build secure, fast, and low-cost blockchain infrastructure for global users, helping developers quickly deploy and manage various types of applications. To achieve this goal, JOC provides a range of supporting development resources:

• G.U. Wallet

An easy-to-use Ethereum-compatible plugin wallet that supports multi-account creation, token transfers, and DApp interactions.

• Lunascape Web Browser

Developed by JOC founder Hidekazu Kondo in 2001, Lunascape was awarded the Annual Software Product Award and was acquired by G.U. Group in 2019. The browser focuses on privacy and data protection, offering faster display speeds and features such as ad-blocking.

• G.U. Blockchain Cloud Service

Provides developers with a mature solution, allowing them to build and use Ethereum-compatible blockchains in just three simple steps, greatly reducing development costs. Developers can choose pricing plans based on their needs.

• G.U. Token Studio

A one-stop NFT issuance and management system that supports features like NFT bridging and sales, currently in beta testing.

• JOC Dashboard

A Web3 application accessible to all users, supporting token and NFT asset management, as well as access to deployable NFT services. Currently, the functionality is relatively basic, and the user experience needs further improvement.

JOC Dashboard (Source: app.japanopenchain.org)

In an effort to attract more users, users who register with an email receive a free on-chain community membership NFT. On-chain data shows that as of February 13, the number of addresses holding this NFT reached 25,876.

Sanbongi Town Collaboration NFT (Source: tokenstudio.gu.net)

In addition to focusing on bank-led stablecoin projects, JOC has also deeply explored the NFT field to assist regional revitalization. In March 2024, JOC collaborated with Kaga City in Ishikawa Prefecture to issue the “e-Kaga Citizen ID NFT” as a digital certificate for Kaga citizens on JOC. In April of the same year, JOC partnered with Yamagata Prefecture’s Sanbongi Town to release a limited edition NFT to celebrate its 70th anniversary, all of which have been sold out.

Furthermore, the JOC team is actively engaging with various Web3 teams globally, covering areas such as DeFi, NFTs, and cross-chain, to build a more diversified application ecosystem.

$JOC Tokenomics

$JOC is the native token of Japan Open Chain and is currently listed on exchanges such as Gate.io and BitTrade. The total supply of $JOC is 1 billion, with the following allocation:

• IEO: 5%
• Early Supporters: 10%, including early-stage investors and supporters
• Validators: 13.4%, allocated for node incentives
• R&D: 19.5%, used for developer incentives
• Community Management: 10%, for the maintenance and development of the JOC blockchain
• Ecosystem: 30.1%, for continuous ecosystem expansion
• Partner Rewards: 12.0%

According to the official token vesting schedule, $JOC will reach 100% full circulation by 2032.

$JOC Token Unlock Schedule (Source: JOC Whitepaper)

Notably, 5% of the total $JOC supply was allocated for the IEO event, with all tokens distributed immediately after the event concluded. According to the team, the IEO reached its target of 1.26 billion JPY (approximately 8.25 million USD), with total subscription applications exceeding 9 billion JPY. The funds raised from this IEO will primarily be used for protocol research, application development, marketing, and essential operational expenses.

Currently, the primary utility of $JOC is to pay for transaction fees on the JOC chain, such as token transfers and NFT issuance. In the future, it may also be used to incentivize ecosystem application developers.

Future Development and Challenges

Japan Open Chain plans to develop and expand its network in phases. Currently, the team has completed the mainnet launch. It is in the third phase, aiming to further expand the user base by announcing open endpoints, increasing node operators, and enhancing token liquidity. The team will focus on optimizing ecosystem tools, launching more ecosystem applications, and strengthening ecosystem governance to build a more robust and decentralized ecosystem.

The mainnet data shows that the JOC team needs to put more effort into market adoption and community user incentives. As of February 14, the JOC chain had over 900 accounts, 110 deployed tokens, and over 500 contracts. Although JOC faces certain limitations in ecosystem application partnerships due to compliance requirements, it can still explore multiple directions to enhance network activity and user engagement, such as:

• Collaborating with more traditional financial institutions to jointly develop compliant and innovative financial products.
• Exploring more types of enterprise-level solutions, such as digital identity and supply chain management.
• Enhancing user and developer education through more online and offline activities to attract and strengthen community cohesion.
• Further improving the incentive mechanism to continuously empower $JOC, providing token holders with options such as staking and community governance.

Additionally, on-chain data shows that the network’s average gas fee per transaction remains around 0.002 ETH (approximately $5–$7), which is still relatively high for users. The JOC team needs to continuously improve network performance. At the same time, the team must carefully balance compliance and decentralization, adjusting strategies flexibly.

Conclusion

Japan Open Chain strictly complies with Japanese laws, advancing bank-led stablecoin projects and NFT-related businesses to build the future financial infrastructure, aligning with current regulatory trends.

However, JOC still faces multiple challenges, including continuously optimizing blockchain performance, strengthening the application ecosystem, enhancing decentralized governance, and empowering the $JOC token. These tasks are interconnected and require ongoing effort and innovation from the team.