This Exploding Crypto Aims to Be the Next Bitcoin | XEN Crypto
A complete guide to XEN Crypto, its use case, tokenomics, game theory and more.
In this article I’m going to do a deep dive of the rapidly exploding $XEN token, what it is, its use case and share my thoughts on its bold aim to become the next Bitcoin.
A whopping 500,000 wallets have been created in the past week alone, during which time XEN accounted for nearly 40% of all Ethereum transactions.
So, what is $XEN token? Let’s dive in.
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What is $XEN Token?
According to their whitepaper, ‘XEN is designed to be a universal cryptocurrency to achieve the original mission of Blockchain.’
What does that mean?
Let’s go back to the beginning. Bitcoin was invented to be a decentralized peer to peer cash with a fixed supply. As I argue in detail in my series The Future of Money, Bitcoin was invented to replace fiat as a better form of money.
Is XEN the next Bitcoin? Let’s take a look at some features with the goal of using first principles to see how the monetary properties of the two cryptos compare. If history has taught me anything, it’s that the better money always wins.
$XEN starts with zero supply and will only be minted by community members. Although there is no supply cap, $XEN will become less inflationary as adoption increases, eventually settling at 2% (the target inflation rate of the U.S. Dollar).
$XEN cryptocurrency is free to mint and early adopters benefit by minting more tokens.
$XEN has no backing nor ‘intrinsic value’ and relies strictly on community participation and network effect to give it value.
$XEN token does not have a controlling or management team, nor a CEO, although it was invented by Jack Levin, an ex-Google employee and early Bitcoin adopter.
$XEN is neither a proof of stake or proof of work, but claims to be a Proof of Participation (PoP) crypto, meaning whoever participates in XEN creation (through minting it for free) has full rights of ownership through self custody.
Demystifying XEN into simple digestible format, then scripting, filming and editing the video, and finally publishing this content, took my team and I about 10 hours. If you found this valuable, consider subscribing.
Does $XEN Token Have Value?
$XEN token claims to have value due to its network effect.
$XEN uses crafty tokenomics to incentivize people to tell others about $XEN while they are waiting to receive their tokens. The more people who create wallets in the interim, the more $XEN the original minter receives.
When users mint $XEN, they must select the future date in which they want to receive their tokens. For example, if one sets the date to 300 days in the future, and 1,000 new addresses are created in the mean time, they will receive roughly 10,000,000 new XEN tokens.
However if the number of new wallets created is 10,000 over those same 300 days, the minter will receive roughly 13,000,000 XEN tokens. This game theory incentives people to tell others about XEN while waiting for their tokens to mint, thereby creating their supposed network effect.
In short, the value of XEN is linked to its difficulty to be minted, which they point out is ‘very similar to Bitcoin.’ Currently users can choose to wait anywhere from a day, to the maximum term of 388 days, although of course one will receive more XEN the longer they extend their mint date.
In the future, the only way to mint more XEN will be by extending the time one has to wait to receive the mint.
$XEN vs. Bitcoin?
As I cover in detail in this article on game theory and money, independent economic actors are incentivized to store their wealth in the hardest form of money.
Therefore, the only question from which you need to evaluate whether or not $XEN token will succeed is whether or not its a better form of money than Bitcoin.
Analyzing from first principles, would a new market participant rather store their wealth in the most decentralized, secure and liquid crypto asset in the world or in $XEN?
It’s extremely unlikely. For that to happen, people would need to first and foremost store their wealth in $XEN for they believe it would have superior monetary features than competing cryptocurrencies, such as Bitcoin.
In reading the entire whitepaper and many of the articles on their website, not once did I find any convincing argument of why anyone would ever hold $XEN instead of Bitcoin. I believe that is because there is none.
One lesson I learned in the past 5 years in crypto is there’s a subtle but profound difference between speculating on a token and wanting to hold it long term.
Will $XEN Token Succeed?
I believe $XEN is an interesting idea with a unique token design, so I’ll credit the founder for that, but I believe it’s virtually impossible that it succeeds as a long term store of value.
That won’t stop people from minting (it is free, after all), shilling the token everywhere on social to increase the tokens they receive, and potentially the price of $XEN to be driven into a frenzy (this already happened once).
Ultimately though, these minters will be looking for an exit, and a place to store their value that will preserve their purchasing power over time, or to cash out their free ‘value’ and spent it.
Soon enough we will reach a point of peak adoption, whereby new wallets and tokens aren’t being created as fast as the sellers are unlocking their tokens and dumping them.
With a never ending pool of sellers, who ultimately don’t want their wealth stored in $XEN, but instead in a better form of money like Bitcoin, the price will crash, and, like nearly every other alt coin before it, XEN will slowly trend toward zero.
XEN and HEX
As I’m thinking through the tokenomics and structure, XEN reminds me a lot of HEX. If you haven’t already, a deep dive into HEX will better help you understand XEN.
In short, I’d argue HEX is a better version of XEN due to its ability to monetize time, which one could argue has value. That said, if XEN has a fraction of the success that HEX did, then the question becomes, what’s the best way to play it?
Is It Worth It To Mint $XEN Token?
It all depends on you. This is not meant to be financial advice, but the way I see it is the the only cost to mint $XEN is the gas one pays on Ethereum, which is currently around $5.
To me, the risk reward is an absolute no brainer. I think of XEN as a crypto lottery ticket. As an asymmetric investor, these are the fun games I like to play. I’m prepared to lose each and every one of my $5 dollars an overwhelmingly large majority of the time for the chance to hit a hundred bagger once in a while.
Spare time on your hands? You can even create multiple wallets and repeat this process as many times as you want. You can then ladder your mint dates to release tokens every month or so, depending on how many wallets you create.
For example, if you create 10 wallets, you can mint new $XEN after 30, 60, 90, 120, 150, 180, 210, 240, 270 and 300 days, then simply dump the token on Uniswap for Ethereum on the release date. If I didn’t have money, but had time, I’d literally create 100 wallets on the offset chance I could retire if I get lucky.
Just be sure to set a reminder to mint your tokens on the date it comes to fruition so you avoid any penalties. After 7 days, you can no longer claim any of your $XEN tokens! If you’re truly daring, you can stake your $XEN to earn extra rewards too.
Finally, I would never mint XEN on a wallet with any value on it or that I plan to use in the future, as interacting with any smart contract is always a risk. I believe it’s prudent to create a dedicated wallet for XEN to avoid any risk of hacks or capital loss, as I would recommend with every experimental token.
Final Thoughts on $XEN Token
Here are four resources to help you explore further. As always, I encourage you to do your own research and come to your own conclusions. If you find something interesting, please share it with me in a comment. I read them all.
If you really want to get into the weeds, you can read their whitepaper for more info. There are articles on their website too.
Here’s a simple to use calculator to help you figure out your rewards based on how long you delay your mint.
Lastly, Dune.com has a ton of info about wallet creation, supply, inflation rates, average mint duration and more.
Here is the link to mint XEN. Let me know if you would like me to create a YouTube tutorial with how to mint, along with my minting and selling strategy. (Again: mint at your own discretion. Interacting with smart contracts is risky. I do believe XEN will trend toward zero over time too and I’d never buy it!).
What I found interesting in analyzing the data is that 60% of wallets decided to only select 1-3 days for their mint. This means they are minting and dumping shortly after.
If you play around with the calculator, you’ll see that it’s much more beneficial (in terms of total tokens accrued) to delay one’s mint date as far into the future as possible.
Few are doing this. This either means we’re very early, that bots are minting and dumping, or the market simply doesn’t believe the $XEN will have any value in the future.
In analyzing the price chart, it already increased 100x in price, and then dropped nearly 99%. Whether it will pump again remains yet to be seen.
As always, I’m highly skeptical and treading carefully. I’ll keep you posted on Twitter and here.
What are your thoughts?
Alec
Great unbiased deep dive that's provides the right amount of detail and info for us to learn more about $Xen. Much appreciated!