Robert Steinadler, 6 months ago
Airdrops are highly desirable and there are groups, forums, and websites featuring opportunities to mint new tokens for free. XEN Crypto is doing something similar that is still different and it is setting a record for the last 30 days on the Ethereum blockchain.
Why is XEN burning up so many fees and is it really worth it or just a pain to everybody else who is trying to use Ethereum?
Data on the Ethereum blockchain suggests that certain exchanges have started minting XEN and also offer the token for trading. Each time XEN is minted the total supply is increased and technically there is no supply cap for XEN.
Some of the tokenomics suggest that its creators had something similar in mind like HEX, which had an impressive run during last year’s bull market.
However, despite its success HEX was and is still perceived as a scam by many observers and commentators on social media. This was mainly due to fact how HEX was marketed. The project claimed that it is designed to go up in value and pictured itself as some sort of time deposit, but unlike a time deposit interest was generated through inflation. Both are indeed two different ways in which income is generated for investors.
The upside of the start of XEN is the immense amount of Ether that is burned due to the high transaction volume. Investors basically only have to visit the website and mint their share by paying transaction fees. This has already caused a supply shock. There is currently more Ethereum burned through transactions than it is minted through staking.
Data shows that XEN is leading and had burned more fees than Uniswap or OpenSea during the last 30 days. But despite the cheerleading for Ethereum and the positive effects of the burning mechanism, there is also a reason for concern. With half the world minting like crazy, costs have increased on Ethereum for other use cases like DeFi applications.
This underlines not only the success story of XEN, but also that scalability remains a problem and that an open market for fees is not always the best solution. While layer-2 protocols like Arbitrum or Optimism offer a way out of this misery, on-chain transactions are still waiting for sharding which is supposed to be one of the next steps for Ethereum in the next year.
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