Ethereum Goes Deflationary As XEN Crypto Degens Plunge In

Almost half of Ethereum’s block space has been consumed by a new project called XEN Crypto which is causing network issuance to fall and gas prices to rise.

“Users have paid nearly $1.8 million in gas fees to interact with the token contract, which has a market cap of $500k,” DeFi analyst ‘@0xfoobar’ reported.

As a result, Ethereum supply has been in decline since October 8th. The Ultrasound.Money dashboard currently reports a -0.41% supply growth, meaning the asset has become deflationary, at least for now.

In the last 24 hours, XEN Crypto has seen more than 1,300 ETH burned, worth approximately $1.7 million.

ETH is going deflationary again, thanks entirely to a token named XEN, which has consumed half of all Ethereum block space in the last day

Users have paid nearly $1.8 million in gas fees to interact with the token contract, which has a market cap of $500k pic.twitter.com/gJ8h2Zl0IF

— foobar (@0xfoobar) 9 October 2022

So what is XEN?

XEN is a project created by the “Fair Crypto Foundation”, supported by Jack Levin, one of the first Google employees working on cloud infrastructure. The ethos aims to empower the individual with a token that starts with a zero supply and has no pre-mint, CEX listings, admin keys or immutable contracts.

‘Foobar’ commented that it “copies a couple of HEX-like mechanics, but the important thing is that an APY exists,” suggesting that there are some Ponzi-type qualities to it.

Launched on October 8, XEN can be claimed and minted or staked and is based on the first principles of crypto: self-storage, transparency, trust through consensus, and permissionless exchange of value without counterparty risk.

According to the XEN Network dashboard, there have been 369,515 active miners since its inception over the weekend. The total supply is 174 million and it offers an APY of 20% for staking the token. Minting is free, but it consumes gas, and prices go up due to the degenerate demand for this new token.

Commenting on the effect on Ethereum, Levin said it was bullish, but perhaps not for those who now have to pay more for their transactions.

When XEN Launched — Ethereum supply shows reduction from October 8th onwards… (Note that 50% of Ethereum gas fees are burned). Bullish for Ethereum. pic.twitter.com/vA51H4rum5

— Jack Levin (@mrJackLevin) 9 October 2022

XEN Price Reaction

The token price pumped to $1 soon after its inception, but has fallen back to $0.0032 according to Coinmarketcap, which just listed it.

It can only be traded on Uniswap at the moment where there is very little liquidity and the comment already suggests that it might be a scam. Time will tell if the latest cake in crypto turns out to be just another scam.