- IOST flagged for investor caution due to its upcoming Layer-2 blockchain migration.
- Transition involves issuing 21.3 billion new tokens, potentially impacting short-term price stability.
- Upbit and DAXA emphasize monitoring the shift to ensure investor protection and transparency.
Upbit, one of South Korea’s largest cryptocurrency exchanges, has issued a cautionary notice regarding IOST (Internet of Services Token), following guidelines from the Digital Asset eXchange Alliance (DAXA). The warning comes as IOST prepares for a major Layer-2 blockchain migration, a move that could significantly affect its tokenomics and market stability.
The upcoming transition involves issuing 21.3 billion new IOST tokens, which are set to support validator rewards, ecosystem incentives, and governance structures. While the migration aims to enhance network efficiency, scalability, and throughput, it’s also expected to bring short-term price volatility—a key reason for Upbit’s cautionary stance.
Upbit Urges Investors to Stay Vigilant
In a January 13 statement, Upbit urged IOST investors to exercise caution, particularly as the transition could bring substantial changes to the token’s structure. The exchange reassured users that it would remain in close communication with the IOST team throughout the process, ensuring asset safety and keeping users informed of any developments.
Upbit’s announcement aligns with DAXA’s investor protection mandate, which flags digital assets undergoing structural changes or unusual activity. Although this isn’t a trading suspension or delisting notice, the Layer-2 migration’s potential to impact investor sentiment has prompted heightened scrutiny.
IOST’s Layer-2 Transition: Aiming for Efficiency and Growth
With the second governance vote for the transition passed on January 12, the IOST team is set to gradually roll out the new tokens. This supply expansion will support key initiatives such as:
- 60% for validator rewards to secure and stabilize the network.
- 20% for airdrops to incentivize new and existing users.
- Remaining funds allocated to community incentives, governance via Nexus DAO, developer grants, and team compensation.
The new Layer-2 system is designed to bridge IOST’s current Layer-1 network, enabling faster transactions, reduced fees, and a more scalable ecosystem.
Final Thoughts: Navigating the Changes Ahead
While IOST’s migration is a bold step forward for its ecosystem, it also comes with risks, particularly for short-term traders. Upbit and DAXA’s proactive measures to inform and protect investors underscore the importance of staying vigilant during such transitions. Whether you’re holding or considering IOST, keeping an eye on these developments is crucial.
