Ethereum’s supply has dropped by around 4,000 ETH so far this week in the first deflationary turn the cryptocurrency token hastaken since the network moved to a Proof-of-Stake consensus mechanism with the Merge.
Every Ethereum transaction includes a gas fee meant to prevent an overload of malicious requests on the network. Since EIP-1559, a portion of the fees is automatically burned, meaning that when the volume of gas being burned surpasses ETH’s issuance, the cryptocurrency turns deflationary.
According to available data, the total amount of ETH in circulation has dropped by over 4,000 tokens so far this week, after average gas fees on the network surged over 200% over the launch of a new crypto project called XEN Crypto.
Etherscan data shows XEN Crypto transactions account for 33% of all gas used network-wide over the last 24-hour period. The cryptocurrency defines itself as a “universal cryptocurrency” that will accumulate worth “as more and more people join and participate in minting.” The token has been labeled a Ponzi scheme by observers on social media.
