Buterin shifts ETH case from fee burns to store of value
Vitalik Buterin says Ethereum should frame ETH as a store of value, arguing fee burns cannot justify its valuation without costly funding and higher fees.
The Blockheight Editors··2 min read
Ethereum co-founder Vitalik Buterin said on Nov. 8 that ETH should be viewed primarily as a store of value, not a fee-burning token, arguing the burn thesis cannot support its value on its own, according to The Block’s report on his X thread. He said Ethereum should keep EIP-1559, which burns part of each transaction fee, but holders should not be concerned if the burn stays below 10% of the level needed to offset new issuance.
Why does Buterin say fee burns cannot set ETH’s value?
Buterin said the valuation model equating market capitalization with annual fees burned divided by a discount rate does not establish a reliable floor. At $1 billion in annual burns and a 4% discount rate, the model implies a $25 billion valuation, he wrote; but he argued that past fee spikes came largely from crypto activity that could fall alongside ETH’s price.
The Block reported that Ethereum burned about 1.48 million ETH in 2022, worth roughly $3.6 billion, compared with about 19,200 ETH, or $43 million, so far in 2026. Buterin said tokenized real-world assets could give ETH a stronger link to external activity, though he added that this business is unlikely to generate comparable fee spikes.
What would a burn-first strategy require?
To justify a market capitalization of about $270 billion through fee burns alone, Buterin said Ethereum would need corporate-scale spending on research and development. Matching a cited estimate for L’Oréal would require about 700,000 ETH a year in protocol funding, he argued, cutting validator revenue by two-thirds.
He also said pursuing higher burns would mean higher gas prices and interventionist governance, which could conflict with Ethereum’s decentralization goals and price some users out. Instead, he pointed to censorship resistance, open-source development, privacy, security and network survival as the basis for ETH’s store-of-value case, according to BeInCrypto’s account of the thread.
What changes for Ethereum next?
Buterin’s comments argue for a different way to explain ETH’s value; they do not announce a change to EIP-1559, which he said should remain. The thread does not set a new valuation target or specify a protocol change, and it remains unclear how the Ethereum community will respond.
Source material
- The Block’s report on his X thread — theblock.co
- BeInCrypto’s account of the thread — beincrypto.com