Source publication time: November 8, 2026, at 23:51:15 UTC+8. This article reflects that reporting period.
Ethereum co-founder Vitalik Buterin argued that ETH’s investment narrative should center on its role as a store of value—not on maximizing the amount of ether destroyed through transaction fees.
In an X thread reported by The Block, Buterin supported keeping EIP-1559, the 2021 upgrade that burns part of every transaction fee. His objection was to treating that mechanism as Ethereum’s central valuation proposition.
“We should not feel sad if fee burn is < 10% of breakeven indefinitely; the value of ETH comes from elsewhere,” he wrote.
Why the burn-based valuation faces limits
Fee burning underpinned the “ultrasound money” narrative that gained traction during the 2021 bull market. Buterin outlined its financial logic: annual token burns of $1 billion, divided by a 4% discount rate, would imply a $25 billion valuation floor.
But that floor is unreliable if the activity generating fees depends on the token’s own price, he argued. Much of Ethereum’s burn in 2021–2023 came from “crypto-internal use cases,” whose revenue could decline alongside ETH.
He cited a sale that burned $180 million in fees in a single day, describing it as a “digital monkey sale.” The Block clarified that the event was actually Yuga Labs’ sale of Otherdeed NFTs representing land in the Otherside metaverse. Users paid as much as $10,000 in transaction fees for NFTs that, at the time of the report, sold for around $150.
“The floor argument only works if the backing of the revenue stream is external,” Buterin wrote.
Tokenized real-world assets give Ethereum a stronger claim to that external activity, he said. However, a stable, mature business is unlikely to generate the same extreme fee spikes.
The Block’s data illustrated the change in burn activity:
- 2022: About 1.48 million ETH burned, worth roughly $3.6 billion.
- 2026 through the reporting date: About 19,200 ETH burned, worth roughly $43 million.
The costs of optimizing for fees
Buterin argued that supporting ETH’s roughly $270 billion market capitalization through fee burn alone would make Ethereum comparable to a large company such as L’Oréal. The Block separately put ETH’s market capitalization at $273.3 billion on the Sunday morning covered by the report.
Using an AI-generated estimate that L’Oréal spends about 0.58% of its market capitalization annually on research and development, Buterin said matching that rate would “bankrupt the [Ethereum Foundation] almost immediately.” Funding it through the protocol instead would require about 700,000 ETH a year and cut validator revenue by two-thirds, he estimated.
That comparison was an argument based on an AI estimate—not an independently established Ethereum funding requirement.
He also said a burn-maximizing strategy would require long-term, “highly interventionist governance,” conflicting with decentralization and resistance to capture. Seeking higher fees would, to some extent, mean seeking higher gas prices, potentially excluding users who most need privacy and security.
The funding discussion comes against a backdrop of criticism of the Ethereum Foundation’s ETH sales. The Block reported that it sold 20,000 ETH, worth about $47 million, to Bitmine over two weeks in April and May. The foundation began staking part of its treasury earlier in 2026 and described itself in a March mandate as “one of many stewards” of Ethereum. Amid senior staff departures in May, Buterin said it would become “a smaller ship,” sell less ETH and concentrate on work that “would not happen otherwise.”
What the store-of-value case rests on
Buterin said Ethereum users most often emphasize decentralization and what he calls CROPS: censorship and capture resistance, open source, privacy and security. For a store-of-value holder, he argued, the first priority is survival.
He linked that goal to post-quantum security, partial ossification of the base layer and a high threshold for adding new precompiles or protocol-level rewards. He also highlighted multisig wallets, the Kohaku privacy project, the FOCIL censorship-resistance proposal and lightweight nodes. As a personal example, he said his laptop node synced in under six hours and occupied one-eighth of its hard drive.
Assets issued natively on Ethereum’s base layer, including real-world assets, could complement that case by expanding what holders can do with ETH—for example, using it as collateral. Buterin described Ethereum as a hybrid of blockchains and modern cryptography rather than simply a blockchain. In September, he had outlined a roadmap through 2030 and said the upcoming Hegota upgrade would likely be its last “normal” fork.
These points explain his preferred valuation narrative; they do not establish a valuation floor or guarantee demand for ETH.
Support—and a separate issuance dispute
Solana co-founder Anatoly Yakovenko supported the central argument, saying Buterin was “absolutely right that you can’t focus on fees as the product.” MetaLeX attorney Gabriel Shapiro called the thread a “‘nature is healing’ moment.” Moonrock Capital founder Simon Dedic described the store-of-value narrative as Ethereum’s “biggest bull case” and an easy story to sell to institutional capital—his assessment, not evidence of institutional demand.
The discussion followed the withdrawal, about five weeks earlier, of EIP-8363 from consideration for Hegota, the upgrade scheduled after the delayed Glamsterdam hard fork. That proposal would have burned a rising share of validator rewards as more ETH was staked. Its authors cited risks that a high staking ratio could pose to “ETH’s role as money,” while SharpLink CEO Joseph Chalom and Aave founder Stani Kulechov opposed it. The authors planned a separate issuance process running through EthCC in April.
At 9:23 a.m. ET on the reporting date, ETH traded at $2,236, down 0.3% on the day, according to The Block. That price snapshot does not settle the debate: Buterin’s argument was about what Ethereum should prioritize, not proof that a store-of-value narrative will translate into higher prices.