Upbit issues a cautious reminder before IOST’s upcoming Layer 2 transformation

PANews reported on January 13 that, according to Cointelegraph, South Korean cryptocurrency exchange Upbit warned that in order to protect investors, the South Korean Digital Asset Exchange Alliance (DAXA) has issued a cautionary reminder regarding IOST tokens. The project plans to transform into a Layer 2 blockchain, which will drastically reform its token economics and network structure. As part of the transformation, 21 billion new IOST tokens will be issued, a process that is often accompanied by short-term fluctuations in token prices. Upbit’s cautious statement on IOST follows DAXA’s guidelines for notifying users of significant network or token economic changes that may affect the stability of the asset.

Although IOST's transformation is not a trading suspension or delisting announcement, DAXA has focused on this Layer 2 transformation because it may have a significant impact on traders. After the second governance vote passed on January 12, the IOST team plans to issue 21.32 billion new tokens to support validator rewards, user incentives, and future ecosystem development. By connecting the existing Layer 1 network with the new Layer 2 network, the IOST team aims to improve transaction processing capabilities, increase efficiency, and reduce transaction fees. New tokens will be issued gradually in phases. Among them, 60% of the new tokens will be used for validator rewards, 20% for airdrop activities, 8% for community incentives, 5% for developer funding, 4% for governance activities through Nexus DAO, and the remaining 3% For team compensation and other expenses.