Yes, leaders can transfer leadership to other members of the site.

First, make sure that there are other members of the blogring to transfer leadership to!  If there are no other members of your blogring, you may want to just delete it.  If that's the case, please see:

Can I close down my blogring?
http://help.xanga.com/closedownablogring.htm

If you'd still like to transfer leadership of your blogring, just sign into Xanga and visit a blogring where you're corrently the Leader.  See on the upper left module, where it says:

Members:
» Invite Members
» Approve Members
» Manage Members
» Your Membership

Just click on "Your Membership", and then on "Transfer Leadership".  You'll be asked to signin, and then you'll see one of several pages:

1) If the other members have opted out of accepting leadership, you won't be able to transfer leadership.  For more information, please see:

I want to transfer leadership to another member, but I can't seem to?!
http://help.xanga.com/canttransferleadership.htm

2) Otherwise, you'll see a list of blogrings members that you can choose as your successor.  To transfer leadership, just find the candidate you want to make leader and click "Transfer Leadership".  After a successful signin, the leadership will be transferred and you will be a normal member of the blogring.