#Upbit reminds of IOST's transformation risk#

Upbit has cautioned investors about the transformation risks of IOST, as the project plans a Layer 2 transition, which will result in the issuance of 21 billion new tokens and a revamp of the token economics. The Digital Asset Exchange Alliance (DAXA) in South Korea has issued a cautionary advisory for IOST tokens to safeguard investors. While the IOST transition is not a suspension or delisting announcement, DAXA has highlighted the Layer 2 transformation as it could significantly impact traders. The IOST team intends to use the new tokens to support validator rewards, user incentives, and future ecosystem development. It also aims to enhance transaction throughput, improve efficiency, and reduce transaction fees by connecting the existing Layer 1 network to the new Layer 2 network. The new tokens will be gradually issued in phases, with 60% allocated for validator rewards, 20% for airdrop campaigns, 8% for community incentives, 5% for developer funding, 4% for governance activities, and the remaining 3% for team compensation and other expenses. As the transformation process often comes with short-term price fluctuations, Upbit's warning urges investors to exercise caution when investing in IOST.