XAI is a token, not a coin. It is used within the XAI Layer 3 network, which is part of the blockchain gaming ecosystem. Tokens like XAI are based on other blockchain platforms like Ethereum or Arbitrum in this case, where they are used to pay fees, reward validators, and provide liquidity within the ecosystem. In the case of XAI, it is used as a gas token and is burned in transactions, giving it a deflationary nature over time  .
When we say that a coin or token like XAI is deflationary, it means that its total supply decreases over time. This happens because of the token burning mechanism, where a portion of the coin or token is “burned” during transactions on the network. For example, when paying gas fees with XAI, a portion of the tokens are permanently removed from circulation. This reduces the available supply over time, which can lead to an increase in the value of the token if demand increases and supply remains limited .
The goal of this system is to support the value of the token by gradually reducing the available supply, which enhances the value in the long run as demand increases.