XEN accounts for more than 40% of the gas consumed on Ethereum over the past day
Well, that didn’t last long.
Less than a month since The Merge, ETH supply has dropped by more than 2,000 digital tokens, according to ultrasound.money.
The mark represents ETH’s first deflationary day since its biggest upgrade went live. And it appears that a mysterious project called XEN Crypto is largely to blame for the skyrocketing transaction fees and corresponding deflationary pressures on ETH, according to on-chain data.
ETH supply. Source: ultrasound.money
When many people trade Ethereum at the same time, it drives up gas prices. Portions of ETH-denominated transaction fees will be burned or permanently withdrawn due to another major upgrade, EIP-1559.
gas guzzler
According to Etherscan, the XEN smart contract accounts for more than 40% of the gas consumed on Ethereum in the last 24 hours.
Not much is known about XEN in DeFi circles. XEN’s website names Jack Levin as its creator. According to the site, Jack Levin was the 21st employee at Google to work on the search giant’s cloud network.
He also started mining bitcoin in 2011 and is the co-founder of ImageShack, a subscription-based image hosting site that raised money from Sequoia Capital, according to Crunchbase.
Levin has maintained a steady stream of retweets about XEN on Twitter since XEN went live less than two days ago.
XEN’s “litepaper” is rather economical in detail. “XEN aims to become a community-building cryptoasset that connects like-minded people,” it says, then highlights what it calls its “unique tokenomics.”
“The value of the XEN token is pegged to the difference between global inflation and the built-in distribution of the tokens,” the litepaper continues before delving into the math and charts.
Complex mechanics
Some of Crypto’s biggest influencers are still trying to understand how the project works.
“I have no idea what this is, but it seems immediately mintable and sellable and has commercial value,” wrote the well-known trader, who credits 0xSisyphus on Twitter.
This isn’t the only time ETH has been deflationary. An NFT coin for the Bored Ape Yacht Club Otherside propelled ETH into deflationary territory in May as minters paid exorbitant fees to get their trades executed.
And to be sure, ETH issuance is still up over 10,000 tokens since the September 15 merger, meaning there is still a long way to go before ETH can be called a deflationary asset. Still, the first deflationary day for ETH since the merger is certainly cause for celebration for long-term investors in the asset.
Ether is down over 25% in the past month, showing that the merger is the sell-the-news event some thought it was.
ETH Price, Source: The Defiant Terminal
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