Nearly half of Ethereum’s block space has been consumed by a new project called XEN Crypto which is causing the network issuance to fall and gas prices to rise.
“Users have paid almost $1.8 million in gas fees to interact with the token contract, which has a market cap of $500k,” reported DeFi analyst ‘@0xfoobar’.
As a result, Ethereum supply has been in decline since October 8. The Ultrasound.Money dashboard is currently reporting a -0.41% supply growth, meaning that the asset has turned, at least for now, deflationary.
Over the past 24 hours, XEN Crypto has resulted in more than 1,300 ETH being burnt, worth approximately $1.7 million.
ETH is turning deflationary again thanks solely to a token named XEN, which has consumed half of all Ethereum blockspace over the last day
Users have paid almost $1.8 million in gas fees to interact with the token contract, which has a marketcap of $500k pic.twitter.com/gJ8h2Zl0IF
— foobar (@0xfoobar) October 9, 2022
So What is XEN?
XEN is a project created by the “Fair Crypto Foundation,” backed by Jack Levin, one of the first employees at Google 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 properties to it.
XEN, which launched on Oct. 8, can be claimed and minted or staked and is based on the first principles of crypto: self-custody, transparency, trust through consensus, and permissionless value exchange without counterparty risk.
According to the XEN Network dashboard, there have been 369,515 active minters since genesis over the weekend. The total supply is 174 million, and it is offering an APY of 20% for staking the token. Minting is free, but it does consume gas, and prices are going up due to the degen demand for this new token.
Levin commented on the effect on Ethereum, saying it was bullish, but maybe not for those that now have to pay more for their transactions.
When XEN launched — Ethereum supply shows reduction from Oct 8th onward… (Note 50% of Ethereum gas fees get burned). Bullish for Ethereum. pic.twitter.com/vA51H4rum5
— Jack Levin (@mrJackLevin) October 9, 2022
XEN Price Reaction
The token price pumped to $1 just after genesis but has fallen back to $0.0032 according to Coinmarketcap, which has only just listed it.
It can only be traded on Uniswap at the moment, where there is very little liquidity, and the commentary is already suggesting it could be a scam. Time will tell if the latest hot cake in crypto turns into just another swindle.