Upbit, a significant cryptocurrency exchange in South Korea, has cautioned investors holding the Internet of Services Token (IOST) as the blockchain project undergoes a critical transition.
This warning, released on January 13, comes in response to guidelines issued by the Digital Asset eXchange Alliance (DAXA), which expressed concerns about potential volatility resulting from IOST’s shift to a layer-2 (L2) blockchain.
IOST, designed for decentralized applications (DApps) focusing on scalability and high throughput, is undergoing a significant overhaul of its tokenomics and network structure. As part of this transition, 21 billion new IOST tokens will be introduced, likely impacting the asset’s stability and market sentiment.
Upbit’s notice emphasized the potential for substantial changes in IOST’s token structure, urging users to exercise caution when holding or trading the token. The exchange will continue to monitor developments in close collaboration with the IOST team to keep users informed of any updates or additional changes during this transitional period.
The upcoming L2 migration, slated for the coming weeks, will enable the IOST network to handle more transactions, improve efficiency, and reduce fees. With the transition, the development team plans to issue new tokens gradually, starting with a phased supply expansion.
A substantial portion of the newly issued tokens—60%—will be allocated to validator rewards, while 20% will be distributed via airdrops. The remaining tokens will be dedicated to community incentives (8%), developer grants (5%), governance through the Nexus DAO (4%), and compensation for the team (3%).
In another development, South Korean authorities have linked North Korean hacker groups Lazarus and Andariel to the 2019 hack of Upbit, in which $50 million worth of cryptocurrency was stolen. On November 21, the National Investigation Headquarters of the National Police Agency revealed that the hackers, associated with North Korea’s Reconnaissance General Bureau, stole 342,000 Ethereum (ETH) from the South Korean exchange.
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