I’ve had some issues with Xen crashing when I wanted to create a DomU for which the Dom0 had to shrink (see bug report). Therefore, it’s better to force a memory limit on the dom0. That is done with a kernel param.

Add this to /etc/default/grub:

# Start dom0 with less RAM

And make sure you disabling ballooning of dom0 in /etc/xen/xend-config.sxp:

(enable-dom0-ballooning no)

Then run update-grub2 and reboot.