LSK Network Transition and attention urged for LSK investments

Dear Upbit users,

Upbit will support the network transition from Lisk Mainnet to Ethereum-based L2 network(Lisk L2).Additionally, the existing Lisk Mainnet will continue through a hard fork led by the community team, Klayr, and Upbit will support the airdrop of KLY, an asset generated through Klayr's hard fork.

Please refer to the details below regarding the network transition. We will provide additional information on the airdrop through a separate notice.

Please note that assets traded on Upbit will be LSK that has completed the network transition to Ethereum-based L2, not KLY, which is an asset generated through the hard fork of the existing Lisk Mainnet.

• Reference : Initial announcement on Lisk's migration to Ethereum ecosystem
• Reference : Overview of Lisk's migration to Ethereum-based L2
• Reference : LSK snapshots and announcements related to migration transfers
• Reference : Introduction to Klayr team's new L1

[LSK Network Transition]

• Network transition: Lisk → Lisk L2
• Additional issuance allocation: Total 246,800,000 LSK (30,000,000 LSK: Investors, 15,000,000 LSK: Operations, 201,800,000 LSK: Community)*Each category is divided into subcategories, and the vesting conditions vary depending on the subcategory. Some items may have their allocation amounts changed through additional DAO voting.*For more detailed information about additional issuance, please refer to the foundation's guidance.*We will inform you separately about the schedule for temporary suspension of deposits and withdrawals due to network transition.*The network transition schedule may be subject to change depending on project circumstances.

[Network transition and additional issuance]

• On December 19, 2023, the Lisk team announced the migration from the existing Lisk mainnet to an Ethereum-based L2 using Optimistic Rollup. The existing mainnet will undergo a hard fork by Klayr, one of the community teams within the Lisk ecosystem, in agreement with the Lisk team. As a result, LSK holders on Upbit will receive L2 LSK (Lisk L2) and KLY, the asset resulting from the hard fork of the existing Lisk mainnet, based on a snapshot that will be announced by the Lisk team in the future.
• Considering the fact that the entire Lisk team will focus on Lisk L2 and a significant portion of assets owned by the Onchain Foundation will be transferred to L2, Upbit will maintain trading support for LSK after the transition to Ethereum-based L2, while deciding whether to support trading for KLY through a separate decision-making process. Regardless, Upbit will support airdrops and withdrawals for KLY resulting from the hard fork.
• Regardless of this fact, Upbit will support airdrops and withdrawals for the hard-forked KLY.
• The issuance limit for L2 LSK(Lisk L2) is expected to decrease from an unlimited amount to 400,000,000 LSK. While inflation was inevitable in the Layer 1 Mainnet to pay rewards to validators participating in stake proof, this is not the case for Ethereum-based L2, as it uses the security of Ethereum. However, if 100,000,000 LSK is burned through DAO voting, the issuance limit may decrease to 300,000,000 LSK. The categories for the newly issued LSK differ in terms of immediate circulation and lockup(up to 10 years), and the increase is as follows:

| Category | Amount(LSK) ||:-------------------:|:-----------:|| Airdrops | 15,000,000 || Liquidity | 10,000,000 || Ecosystem Fund | 7,800,000 || Staking Rewards | 24,000,000 || DAO Fund | 45,000,000 || 10 Year DAO Fund | 100,000,000 || Team | 7,000,000 || Treasury | 8,000,000 || Strategic Investors | 30,000,000 |

• The circulating supply of L2 LSK is expected to increase from approximately 153,000,000 LSK to approximately 200,000,000 LSK immediately after the network transition. The specific increase is as follows:

| Category | Amount(LSK) ||:---------------------------:|:----------:|| Ecosystem Fund | 5,000,000 || DAO Fund | 6,250,000 || Strategic Investor Fund | 10,000,000 || Liquidity | 10,000,000 || Airdrops | 15,000,000 |

Please rest assured that Upbit is fully committed to ensuring the safety of your trading.Thank you.

※ Digital assets are highly volatile and your investment may result in significant loss.※ If there is any discrepancy between the translated English version and the original Korean version, the Korean version shall prevail.