XEN Crypo is a token that made Ethereum deflationary and is potentially the one that ignited the next bull run. It’s free to mint, and twe supply started from zero. The value was also zero at the start, but the price spiked to $3.68 the next day, only to fall by 99% in the next three weeks. People continue minting, going against all XEN price predictions, forecasting lower lows and XEN continues expanding to new chains, so why do we see historical achievements in the number of new addresses created, transactions made and gas burned thanks to XEN and how does it influence the XEN token price? Let’s see what the mechanism behind XEN’s value creation is and how it could reflect on prices in the future.
What is XEN?
XEN is a token based on the first principles of crypto that can be minted by anyone by connecting their wallet to an interface presenting the XEN Crypto smart contract. It is and will always be free to mint, and the network fees vary depending on the chain. The contract is immutable and there’s no pre-mint or any venture capital or team reserved allocation. The supply is highly inflationary in the distribution phase and disinflationary in the long run. Inflation is controlled by the tokenomics of XEN, which is based on a logarithmic formula.
The inception of XEN
XEN started to be traded on the open market as soon as the first XEN mint happened on October 9th, 2022. The opening price was $0.006148 and it spiked suddenly to a record high of $3.68. As a result, it fell to a low of $0.000006032.
The highest trading volume on Ethereum was 51 million XEN. The majority of mints were of just one mint term, and almost all of that XEN was dumped on the market. As time progressed, mint terms started to extend and trading volume decreased. It’s currently at 3 million.
At the same time, the XEN Crypto contract was deployed to 8 other chains (BSC, Polygon, Avalanche, Ethereum Pow, Moonbeam, Evmos, Fantomm, and Dogechain), gaining first place as the biggest gas guzzler wherever it went, creating millions of new addresses and transactions. Polygon’s global rank (total number of claimed XEN ranks) is the highest now; BSC is second.
XEN was listed on centralized exchanges like MEXC and Huobi before it even existed. Soon after, other centralized exchanges listed it without any kind of marketing effort or listing fee. It is now traded on Huobi, Poloniex, MEXC, Gate.io, Digifinex, BingX, and BKEX.
Today, XEN is responsible for nearly 30 million new addresses across all chains, 6036 ETH or USD 9,852,805 burned just on the Ethereum blockchain and its deflationary effect on Ethereum since Merge.
XEN price prediction
XEN is so volatile now that making an accurate price prediction is impossible. The liquidity on exchanges is too low because of the novelty of the project, and on decentralized exchanges it’s often missing when it comes to smaller chains. It’s also because XEN relies on a formula incentivizing people to hold the tokens for long periods of time. As long as the maximum term limit is chosen, the token doesn’t even exist yet, and the total supply is just an estimation. Tokens from short mint periods arrive on exchanges to be sold immediately, mostly for USDT and USDC. Total volume on CEXes is $2,219,262.74 and on DEXes is $102,053.18.
For such a new token, XEN achieved enormous success. If you think that the token is free and can be minted by anyone, there’s no need to buy it. Yet people buy it for different reasons, and price speculation is one of them.
Every mint costs a gas fee, and the fee grows with the network usage and with the price of ETH going up. Minters mint XEN at low gas prices and sell it when gas spikes and the perceived value of XEN is higher.
Game theory assumes that people will tend to sell above the gas price they paid for producing their tokens, so ETH gas seems like the main driver behind the price. However, it doesn’t seem true at the moment because a 1-3 day mint, which constitutes 55% of the total supply, costs more in gas fees than the market value. At the time of writing, a 1 day mint of 42,750 XEN costs USD 2.6 and XEN claim costs USD 1.8 while the market value is USD 0.26. It means that it’s better to buy rather than mint. This would indicate current price trend reversal that can’t be observed for now. The reason why 1-3-day users mint at a loss of USD 4.14 per mint is unknown.
A similar situation is a great opportunity for arbitrage. It makes more sense to buy the token on Uniswap and have it now rather than minting it for a higher gas price and having it in the future. The value of this temporal arbitrage is equal to the gas price you paid for the transaction multiplied by the estimated future gas price at the end of your mint term and the factor representing community growth.
The price of XEN is hitting lower lows as the supply is expanding. Some price predictions say that XEN is going to add two more zeros to its current price before finding the floor. Many expect big buy-ins then because of the minting unprofitability that won’t be offset by the maximum mint term yield. That’s probably the point where buyers will get into raising the price, however the arbitrage opportunity exists already now and the savvy traders can use it to their own advantage.
XENFTs effect on XEN’s value
Jack Levin, the founder of the Fair Crypto Foundation behind XEN Crypto and the creator of the XEN Crypto Lightpaper, announced the arrival of XENFTs. XENFT is a tool for virtual mining of XEN which allows claiming up to 128 on Ethereum or Polygon ranks in one click. The tool will make minting XEN fast and easy and will give the user an NFT with the possibility to trade now the future value of the underlying batch of XEN mints. It’s expected that this will ratchet up the global rank and raise gas prices again. The NFT should also prompt users to choose the maximum mint term over the short one because the maximum XEN mint becomes available at the present moment and there’s no good reason why it shouldn’t be preferred. This tweak in the temporal aspect of XEN mints will also influence the price, preventing it from falling due to the one-day mint term dump.
XEN supply and its value
As XEN’s supply keeps being created according to the logarithmic function and the multipliers keep decreasing while the number of participants keeps growing, we’ll see a steady disinflationary effect. XEN has 3000 days before the amplifier goes down to 1. The EAA (Early Adoption Amplifier) will end soon on Ethereum, while on Polygon it has already ended when 10 million addresses have been created. The minting difficulty is rising every day. In four years, people will mint only half of what they can mint today. After the AMP ends, it will be possible to mint just 10 XEN per day. Before that day happens, it may become so unprofitable to mint XEN due to gas prices for both minting and claiming that the only XEN we’ll see will be those minted during the current distribution phase. At this point, there are already some projects burning XEN and, at one point, they may even contribute to making XEN deflationary.
Contrary to fiat, where it has exponentially compounding inflation and is printed at the whim of some people in power, XEN’s supply is limited by its function and can’t be changed. XEN is a store of value in relation to fiat because fiat’s supply will continue expanding indefinitely by an undefined number until it exists. At a protocol level, XEN’s value expressed in fiat is the difference between new participants joining the network and the total of daily XEN emissions. The inflation differential between fiat inflation and XEN’s disinflationary curve creates the value of XEN and it’s higher as time passes by and more fiat is created.
Adoption of XEN
In just 22 days since its inception, XEN minters created over 28 million addresses across 9 chains. In comparison, DogeCoin counts barely 4,448,324 addresses and 82.38% of the total supply is owned by 0.02% of addresses. Companies like Tesla, AirBaltic, or AMC receive DOGE as a payment on the premise of a little over 4 million addresses. With 28 million addresses in existence, XEN has a much bigger chance of being accepted by a company. When that moment comes, XEN’s price will be much higher and its value will reflect a genuine adoption. XENFTs add to XEN’s value because the Proof of Participation protocol counts your time and engagement. Different DeFi protocols, like, for example, Popcorn DAO, which enables XEN staking with rewards in POP tokens, or Uniswap, create another kind of market value. There are already different dapps aiming at burning XEN and a game of rock, paper, and scissors built by Splash Games.
The number of use-cases XEN found during the first three weeks of its existence is an initial indicator of its future utility. The more people join the network, the more utility the token will have. As a consequence of the network’s growth and, in accordance with Metcalfe’s law, also XEN’s value will grow. “Value is really derived from the people that are joining the protocol and the new stuff being built on top of it. That’s the complementary aspect of it—the abundance of XEN is what brings those communities together and those builders together to build new things” said Jack Levin.
Taking into consideration all the above points, like the disinflationary math function creating a natural cap on inflation, the protocol incentivizing people to join en masse, and dapps creating utility for the token, we can’t predict the exact price of XEN, but there’s an indication of a non-zero value.