XEN Crypto Token Responsible For Half Of Ethereum’s Recent Gas Usage

Key Takeaways:

  • XEN crypto project led ETH burns over the past few days.
  • However, XEN prices have fallen to nearly zero after rising to $1.04.
XEN Crypto Token Responsible For Half Of Ethereum's Recent Gas Usage
XEN token minting accounted for the majority of ETH gas usage over the weekend. Image from the company website

NEW DELHI (CoinChapter.com) — XEN token, a new crypto project on Ethereum, has been responsible for nearly 27% of all ETH burns in the past seven days.

The increase in burn rate made Ethereum’s ETH token deflationary for consecutive days. Moreover, the event also saw Ethereum gas fees spike. Since Oct 8, ETH supply has declined by over 5,200 ETH tokens due to the XEN crypto airdrop.

ETH supply became deflationary due to XEN crypto minting activity
ETH supply became deflationary due to XEN crypto mining activity. Source: Ultrasound Money

However, ETH prices failed to react to the deflationary pressure – that is, more ETH was destroyed than created – on Tuesday. A decrease in the supply of an asset while demand remains the same often acts as a bullish trigger for the asset’s price action.

XEN Token: What is it?

The Fair Crypto Foundation created the XEN crypto token using the Ethereum blockchain. Per the project’s website, the XEN token aims to give users financial independence by letting them mint XEN tokens for free.

XEN crypto takes a new approach with no premint and fixed supply. Ex-Google engineer and crypto influencer Jack Levin founded the project. It defines itself as a cryptocurrency with “no intrinsic value” but will grow as more “people join and participate in mining.”

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The project’s token debuted on the weekend and started with no supply. Users had to pay gas fees in ETH to mine XEN tokens.

XEN Crypto Price Action Has Users Suspicious

The XEN crypto aims to become a deflationary tool for ETH price. Since any address can mint XEN by paying gas fees, the process consumes a vast amount of gas fees.

A complex formula determines the number of XEN token each miner receives, depending on the number of people who interacted with the smart contract and how long a user could wait to receive their tokens.

XEN Crypto Price Action Has Users Suspicious
XEN price have dropped to almost zero. Source: CoinMarketCap

Furthermore, the XEN crypto project does not stop users from launching a Sybil attack, where a single user mints tokens using multiple addresses. On Oct 9 morning, the XEN crypto price spiked to $1.04 from its launch price of $0.0056, a jump of 18,471% within 25 minutes of launch.

However, within five minutes of reaching its ATH, XEN prices dropped to a fraction of a cent before continuing its downtrend to nearly zero value. As such, miners have spent nearly $5.2 million in gas prices to mint what is essentially now a worthless token.

Users took to Twitter to criticize the XEN crypto project
Users took to Twitter to criticize the XEN crypto project

The price action led to several users calling the XEN crypto project a ponzi scam. Crypto investor mhonkasalo shared the general view while highlighting how such scams can be harmful to legitimate projects like Ethereum

Other users also shared similar posts. However, the XEN crypto project’s founder Levin argued that the “no pre-existing supply” factor helps make the XEN price action operate on a fair system.

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XEN Crypto, XEN Crypto Token Responsible For Half Of Ethereum’s Recent Gas Usage

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