Ethereum Users Have Been Burning ETH To Mint VMPX Tokens

The smart contracts that account for the highest transaction fees on Ethereum are generally household names, so an unknown project topping the charts is an unusual event.

That’s what happened this week when users racing to use a smart contract to mint a token called VMPX pushed gas prices on Ethereum to their highest levels since May.

VMPX is an asset designed to connect the Bitcoin and Ethereum blockchains, according to Jack Levin, the founder of the XEN ecosystem, a token with ties to VMPX.

“We’re developing one of the first bridges between the world's largest crypto ecosystems, Bitcoin and Ethereum,” he told The Defiant, adding that holders will be able to stake VMPX in order to earn fees when people transfer assets between the two blockchains.

VMPX led all contracts in terms of burned ETH as of July 6, putting it ahead of typical gas guzzlers like Uniswap and the USDT stablecoin.

$90M Burned

Projects in the XEN ecosystem have spiked gas before.

XENTorrent, another project in the ecosystem, accounted for 11% of gas usage in April. XEN also pushed ETH to become a deflationary asset in October 2022.

“I think in total, we burned about $90 million dollars worth of ETH so far,” Levin said.

XEN is an outlier as a project — while most crypto ventures tend to at least have some affiliation with a specific blockchain to begin with, XEN has been multichain from the start.

In fact, across major blockchains like Avalanche, Polygon, BNB Chain, and Fantom, XEN is either the number one or number two token in terms of how many addresses have sent or received it.

This week’s mint was for a version of VMPX on Ethereum. A version of VMPX using the emerging Bitcoin standard called BRC-20 already exists and has a $7.8M market capitalization, according to BitX, an exchange and data provider.

Levin said that he wanted to expand XEN to Bitcoin, but it wasn’t feasible due to the blockchain’s design. “We thought okay, we need to launch a XEN-like product, but it cannot be called XEN because it will not have the same economics,” he said.

Simulated PoW

Levin said that they wrote the code for VMPX’s launch on Ethereum, to mimic how Bitcoin’s Proof-of-Work system works.

Like many projects in crypto, XEN and VMPX, are experimental, with utility that isn’t entirely clear. Levin likened XEN to a currency in a game like Monopoly board game.

“It’s like a marketing token that gets you crypto without you needing to buy it from anyone,” he said. “You come to the smart contract and mint it yourself.”

Notably, XEN doesn’t have a “premine,” a preset amount of tokens allocated to investors and early contributors. “We wanted to go back to the roots of Bitcoin creation, which never had to raise any money,” Levin said.