Currently, financial institutions across the globe are struggling with all-time high inflation, whereas Ethereum prices are out of this effect.
Sources suggest that the Ethereum( market has seen a decline of about 4,000 tokens; however, contrary to the theory, Ethereum prices haven’t seen a significant upliftment. The Ethereum prices, despite the lowered supply, have continued to show a declining trend.
At the time of writing, the Ethereum price is recorded at $1,283.64 compared to $1352.24 on October 7th, signifying a 4.98% drop. Since Ethereum’s network landmark moved to prove of stake in September, this turn marks the first deflationary run, where more Ethereum is being destroyed than created.
All Ethereum transactions involve gas fees, a certain sum charged by the validators processing the Ethereum transactions. The gas fees also enhance the network’s security by preventing the overloading of malicious requests in the network. With higher traffic in the network at a given instance, the gas fees are bound to yield higher. However, since the launch of an upgrade EP-1559 last August, a portion of every gas fee has also been destroyed to automate transaction rates and limit the supply of Ethereum.
Since Saturday, the Ethereum gas fees’ cost and volume started burning more Ethereum than created via staking the post-merge process. This led to a significant decline of more than 4,001 Ethereum and counting, whereas the gas fees have witnessed a 281% spike since Friday.
Data suggests that the sources of irregularities in the Ethereum traffic and the spiked gas fees seem to come from the novel token project XEN Crypto. XEN is a cryptocurrency created by a Google engineer and crypto influencer Jack Levin. XEN is a universal cryptocurrency with no intrinsic value; however, its intrinsic value can be set as more people join and participate in the network. It was launched this weekend with zero supplies but was accessible to mint; however, users would be levied with gas fees.
On Sunday, Xen’s price jumped from a fraction of a cent to $1.04; however, within 5 minutes, it came crashing down to less than a cent. Sources suggest XEN minters, within a day, paid $2 million as gas fees to generate the token, which now seems functionally worthless.