What is the XEN Cryptocurrency?
XEN is a social mining project based on a PoP mechanism. Any crypto user can connect compatible web3 wallets and mint XEN tokens on Ethereum. The XEN tokenomics is based on the number of users and the minting period. As the number of participants increases, the minting difficulty also increases, and supply reduces.
XEN crypto has been a regular presence in the top 5 gas guzzlers on Etherscan since its launch on October 8th 2022, leading to a dent in ETH emissions and causing the currency to be deflationary (for now).
Anyone can mint XEN on Ethereum just by paying the gas fees and choosing a set waiting period.
At its peak, almost 50% of Ethereum's block size was consumed by a new crypto project known as XEN, topping the burn leaderboard and leading to an increase in ETH gas prices. XEN was launched on 8th October, and since then, there’s been a steady downward trend for the supply of ETH that outstrips its current supply growth of +0.04%, as seen on ultrasound.money.
The change in supply made ETH reach a "post-Merge milestone" as it became deflationary for the first time since the Ethereum network shifted to a proof-of-stake (PoS) consensus mechanism. Currently, more ETH is burned validating transactions than issuance, and while it's no longer the top burner, XEN still sits in the top five according to on-chain data.
So, what is the XEN cryptocurrency, and how does it work? Read on to find more.
Who Founded XEN?
XEN is a joint virtual mining project initially launched on the Ethereum network. It was created by the Fair Crypto Foundation, backed by Jack Levin – supposedly one of the first Google employees.
The idea behind XEN, which Levin calls the “people’s token”, is based on principles like “self-custody, trustless consensus, and decentralization.”
XEN’s Impact on ETH
After the London Fork, the Ethereum base fee is determined by the network activities and is burned afterwards. Besides, the validators' reward after the Merge comprises the tip fee (the cost you pay for validators to prioritize validation of your transaction) and the block subsidy (fixed at 2 ETH per block and divided equally among the validators).
With a portion of the gas fees burned and eliminated from circulation, the surge in interest in XEN has caused a dent in ETH emissions, rendering the cryptocurrency deflationary for now. After all, since the Merge, which marked Ethereum's shift to a Proof-of-Stake (PoS) mechanism, ETH's supply rate has significantly declined.
According to ultrasound.money, the ETH supply change has dropped to less than 6,000 tokens post-Merge, compared to over 300,000 before the Merge – a total decline of more than 95%. However, low network activity during this bear market has proved that supply decline alone can't make ETH deflationary, as seen by the upward trend until October 8 2022.
With the arrival of XEN and its “free” cryptocurrency, where users only needed to connect their wallets and pay for transaction costs, base fees started exceeding the deflationary threshold post-Merge, which was set at 15.43 gwei according to a Kraken report. At the time of writing, the gas fees hovered between 16-17 gwei.
At its peak, Etherscan data indicates that XEN minting has accounted for over 40% of all Ethereum transactions and has increased Ethereum gas fees above $1. To date, XEN minters have paid almost $2 million in ETH to interact with the XEN dApp. Besides XEN pushing the ETH burn rate, it has significantly reduced the network's inflationary status. Before the launch of XEN, ETH's inflation rate was 0.21%. Currently, its inflation rate is 0.04%, representing a significant drop.
Unique Features of the XEN Cryptocurrency
Infinite supply: While Bitcoin has a maximum supply of 21 million, XEN has an infinite supply, implying XEN minting will continue for eternity.
XEN mining requires a small amount of computing power: Bitcoin mining requires sophisticated equipment and graphics that consume a significant amount of power. However, you can mine XEN crypto by linking your wallets to the XEN dAPP (decentralized application).
No limit on wallets: XEN allows you to create as many wallets as you want, as long as you’re willing to pay the gas fees. However, once you have claimed your rank and are waiting to receive your tokens, you can't claim another cRank using the same wallet. You must wait until the end of your term to mint tokens using the wallet gain.
How to Mint XEN Crypto
Like Bitcoin, the XEN cryptocurrency Is not connected to your identity. Therefore, you can mint as many tokens as you want. But this means bots can also mine XEN. To eliminate them, XEN requires you to connect your web3 wallet to the XEN dApp, and claim your cRank. Below is a step-by-step guide on how to get along:
Step 1: Choose Network
Step 2: Connect Wallet
Click the "Connect Wallet" tab to connect your web3 wallet. Remember, dApps require users to connect their wallets to interact with them.
Follow the connection prompts in your wallet to get connected properly.
Step 3: Mint XEN
Click the "Mint Free XEN" tab at the bottom of the new window.
Afterwards, you will see your global rank and the days you must wait to mint free XEN tokens.
Click on "Start Minting" to initiate the transaction.
Approve the transaction request on your web3 wallet to finalize the process.
Though you don't need mining equipment and software to mine XEN, you will incur transaction costs for using the blockchain. Currently, it costs around $3.50 to send a XEN minting request on the Ethereum network.
Step 4: Claim Free XEN Tokens
At the end of your waiting period, visit the XEN dApp, connect your wallet, and claim your XEN tokens.
Remember, you must claim your XEN tokens within a day when your waiting period ends. Otherwise, the XEN algorithm will punish you by steadily reducing your rewards. The gradual reduction mechanism is calculated in days; after seven days, the rewards will shrink to zero, as shown below.
Source: XEN Litepaper
If you feel that the waiting period is too long or need XEN urgently, you can buy it from crypto exchanges including Gate.io, MEXC Global, Huobi Global, and BKEX. Visit CoinGecko's XEN markets to see more exchanges where you can trade XEN.
What is XEN Crypto Used For?
According to XEN's lite paper, XEN's mission is to become a community-driven encrypted asset that embraces the original fundamentals of blockchain technology – decentralization, transparency, censorship resistance, P2P value transfer, and ownership. It allows people to enter the crypto world seamlessly and cost-effectively via its unique economic model.
The XEN team believes that most cryptocurrencies are polarized, high-market cap coins are overbought and sold, and most investors ignore low-market cap assets for no substantial reason. Additionally, the team says that most cryptocurrencies are pre-mined by the founders and giant whales, then dumped in the market for average investors to buy.
Hence, XEN’s approach of implementing fair minting of XEN tokens, where no pre-mining takes place.
Does XEN Have Value?
XEN’s value has been on a steady decline since its listing, and currently sits at $0.00000757, a drop of 97.95% since its high of almost $0.00037 . Realistically, XEN is unlikely to stand out as a long term investment opportunity, as most minters will be looking for an exit, where they will be unlocking their tokens and selling them on exchanges. That said in 2023, XEN has been on the rise in April, increasing by over 380% since 1 April. Some reasons could be due to the growth of the Xen ecosystem, where protocols like DBXen (DXN) and Fenix enable the minting of new tokens through burning XEN, which in turn limits the supply of XEN.
Is XEN Crypto Safe?
XEN’s rewards factor in the number of people who interacted with the contract before you. In short, the more people minting XEN, the higher your rewards. In light of that, it’s possible to see the similarity to a pyramid scheme.
However, the XEN founder is not anonymous, unlike most pyramid schemes, and XEN also doesn’t require any investment beyond paying Ethereum’s gas fee. It is also tradeable on multiple exchanges, so you could theoretically cash out at any time once your minting period ends (although whether you’ll earn back your gas fee depends on the value of XEN).
At the very least, XEN is an interesting social experiment, even if it’s not a good investment opportunity. If you find it worth burning a few dollars as minting fees and waiting for your minting period to expire, you can try your luck.
The XEN cryptocurrency has no supply limit and leverages the proof-of-participation (PoP) consensus mechanism, letting users utilize Ethereum-based wallets to mint new tokens by paying the applicable Ethereum gas (transaction) fees, making it one of the easiest cryptocurrencies to mint. Even in April 2023, XEN Crypto is still topping the charts of Etherscan's gas guzzler leaderboard, on top of enjoying a 181% increase in price since January 2023, so it seems that for now, XEN will be here to stay.
This article is for education purposes only and should not be taken as investment advice or an endorsement of the protocols covered. Always do your own research before investing in any protocol.
Josiah is a tech evangelist passionate about helping the world understand Blockchain, Crypto, NFT, DeFi, Tokenization, Fintech, and Web3 concepts. His hobbies are listening to music and playing football. Follow the author on Twitter @TechWriting001