This Token Guzzled 42% of Ethereum Gas in the Past 24 Hours

Crypto project XEN has burnt $1.85 million in Ethereum gas fees in the past 24 hours, but some in the crypto community warn that it could just be a pump-and-dump scheme.

This has accounted for 42% of the gas used in the past 24 hours. The XEN project’s official Twitter handle also tweeted about the incident, saying it would only get bigger.

Those in the crypto community have begun to discuss the project and the burn in earnest, with some calling it a Ponzi that is single-handedly reducing the supply of ETH. Others are more baffled by the development, only noting its odd rise to having such a strong presence on the Ethereum network.

Some pointed to the burn contributing to Ethereum’s deflationary status and XEN’s involvement in the past few days. The Ethereum Improvement Proposal 1559 introduced the burning of base fees and a general overhaul of the fee market mechanism. Once blocks are more than 50% full, the base fees increase or decrease by 12.5%.

If the burns continue, it could have a fairly significant impact on the token and network. It’s only a few days since this has been happening, but crypto community members are drawing attention to it and the nature of XEN.

What is the XEN project?

XEN is a project that was founded by Jack Levin, an ex-Googler, and states that it follows “the first principles of blockchain that anyone can mint themselves by connecting a wallet compatible with Ethereum, setting up a term limit, and sending a transaction.” The tokens are free to mint, the project says, and the cost involved is a network fee.

The network even celebrates the high gas fees it engendered and says that it has burned over $1 million in Ethereum gas fees. Four thousand addresses began minting upon launch, which took place on Oct. 8. Over 402,000 XEN claims have been made.

Is it a scam?

To most crypto community members, the XEN project appears to be untrustworthy. There are some reasons backing this, including typos on the project’s website and, most importantly, the fact that it appears too good to be true. The project allows anyone to mint so as long as they have Ethereum-compatible wallets, and it requires no initial funds to begin the process.

The concern is that when the token appears on DEXs, it will begin a pump-and-dump process that could result in losses for many. So far, the token appears to have some resemblance to a pump-and-dump, with a 99% drop in price over the past 24 hours. Earlier, it jumped exponentially from $0.0062 to $1.04.

The project has understandably raised suspicion, and the community will want to be wary of such a project. Projects which could potentially be pump-and-dump schemes have an enormous potential to result in losses.