October 10, 2022

A new crypto token called XEN, which some have called a Ponzi, has consumed over 40% of gas on the Ethereum network over the last 24 hours, as per data from Etherscan.

Image by Miloslav Hamřík from Pixabay

“ETH is turning deflationary again thanks solely to a token named XEN, which has consumed half of all Ethereum blockspace over the last day,” wrote DeFi analyst foobar in a tweet on Sunday.

“Users have paid almost $1.8 million in gas fees to interact with the token contract, which has a marketcap of $500k,” he added.

XEN is the native crypto token of a blockchain project created by an entity called the “Fair Crypto Foundation” with backing from Jack Levin, one of Google’s earliest employees. The token uses a Proof-of-Participation mining mechanism, meaning anyone with an Ethereum wallet can participate in its launch. The token can be minted for free and the amount of tokens received depends on when it is claimed.

Some market participants cautioned that the project exhibited tendencies akin to crypto Ponzi schemes. Still, the demand from DeFi participants interacting with the contract has likely helped push the average gas fee on Ethereum above 30 gwei.

“This is the first project that has managed to burn a meaningful amount of Eth since the merge, so I am supportive of the game that the participants want to play. I wouldn’t buy any tho,” said one industry watcher on Twitter.

According to data from ultra sound money’s dashboard, Ethereum saw a considerable reduction in supply since XEN launched on Oct. 8, owing to the gas fees burned during transactions.

The XEN token is currently tradeable on decentralized exchange Uniswap and has been listed on MEXC Global. XEN’s value has declined 77% in the last 24 hours, according to data from CoinMarketCap.