Over the weekend, Ethereum issuance declined while the XEN token network recorded a surge in gas consumers. Significantly, on-chain activity and gas consumption has increased on the Ethereum network. Experts say Ethereum might switch back into deflationary issuance.
Similarly, the increased on-chain activity on the ETH network has resulted in more gas usage. That is, more Ethereum tokens are burnt on the network. Hansen tweeted that XEN Batch Minter and XEN Crypto remained among the highest gas consumers on Ethereum in the past seven days.
Furthermore, the ultrasound money tracker said the XEN token now has the highest surge in gas consumers. The data analytics revealed that over the weekend, XEN burnt over 210 ETH, or approximately $260,000. This record is more than Opensea, Tether, and Unisoft's gas consumption.
Significantly, the surge in XEN consumption has led to Ethereum issuance dropping close to zero. It is worth of note that XEN minting automatically pushes up gas prices and pushes down Ethereum issuance.
At this juncture, it is expedient to identify the mechanism behind XEN and how the token works.
Since the launch of the XEN token on the 8th of October, 2022, the token has maintained a top 5 position among gas guzzlers on Etherscan. You can mint the XEN token on Ethereum by paying the gas fees and choosing a set waiting period.
Significantly, the XEN project consumed about 50% of Ethereum's block size— leading to a surge in ETH gas prices. The ultrasound money report showed that the XEN token has resulted in a steady downward trend for ETH supply. Similarly, it has outstripped its current supply growth of 0.04%.
This change in XEN supply made ETH reach a "post-Merge milestone," — making it deflationary for the first time since the Ethereum network switched to the proof-of-stake consensus mechanism.
Similarly, validators now burn more ETH to validate transactions compared to the ETH they burn for issuance. Therefore, it is no longer the top burner, while XEN remains in the top five positions.
XEN minting has continued to push up gas prices and push down Ethereum issuance. Experts opined that Ethereum deflation would increase when on-chain activity picks up. Furthermore, with the burning and eliminating a portion of the gas fees from circulation, there has been a surge in interest in XEN. Similarly, the surge has caused a dent in ETH emissions, making the ETH deflationary.
Significantly, XEN minting has directly impacted Ethereum transactions. The minting has accounted for more than 40% of all ETH transactions and has led to a surge in Ethereum gas fees. Report shows that XEN minters have paid about $2 million in ETH as it is required to interact with XEN decentralized apps.
Furthermore, XEN continues to push the Ethereum burn rate and has drastically reduced the network's inflationary gap. You would recall that before the XEN launch, ETH's inflation stood at 0.21%. However, its inflation rate currently stands at 0.04% — showing a massive drop in 3 months.