Ethereum’s net issuance is set for a deflationary path due to on-chain activity and a surge in gas consumption. Data shared by a analyst showed that Ethereum’s issuance is close to zero [around 0.0011% per year].
All Eth transactions require gas fees, that boost up Ethereum’s security by preventing the network from malicious requests. The greater the traffic on the Ethereum network, the higher gas fees will rise.
Validators who process all ETH transactions pocket the gas fees. Since the launch of the burning proposal called EP-1559 last August, however, a portion of every gas fee has also been destroyed, to automate transaction prices and limit the supply of ETH.
Average gas fees on the network have meanwhile registed an uptick.
The reason of the irregular surge in Ethereum traffic and spike in gas fee that switched ETH’s issuance on a deflation mode appears to be a novel token project called XEN Crypto.
It is one of the highest gas consumers at the moment. Over the last 24 hours, XEN has burnt more than 210 ETH, or roughly $260k.
The gas consumption was more than OpenSea and near to Uniswap v3, the analyst noted.
XEN (a pointless scam token) is currently ~15% of Ethereum gas spend. – 4x more than all L2s. – 20% above OpenSea. – Not far from Uniswap v3.
XEN, a cryptocurrency launched on October by Google engineer and crypto influencer Jack Levin, defines itself as a “universal cryptocurrency” with “no intrinsic value” that will accumulate worth “as more and more people join and participate in minting.”
Ethereum Shanghai Upgrade To Enable Staking Withdrawals
The token recently came under a Sybil attack and a minting exploit that saw the attacker mint over 100 million tokens.
The concept initially gained attention for enabling users to create tokens by merely paying a gas price. With both the attacks affecting the network, the future of XEN looked bleak with analysts calling it “pointless scam project.”
It was claimed that the XEN token’s value came from the community, but that no longer seems to be the case. The token grabbed media attention for burning $1.85 million in ETH gas expenses in a single day,.
On the other hand, the Ethereum Shanghai hard fork has been scheduled for March 2023. The update will implement EIP-4895 which enables withdrawals of staked ETH, TronWeekly reported.