Historical report: The Block published the original article on November 8, 2026, at 23:51:15 UTC+08:00. Figures and event timing below reflect that report.
Ethereum co-founder Vitalik Buterin argued that ether (ETH) should be valued primarily as a store of value, rather than as a token whose value depends on transaction fees being burned. His argument was not to remove fee burning, but to stop treating a high burn rate as Ethereum’s main objective.
In a Sunday morning thread on X, Buterin said Ethereum’s decentralization, censorship resistance, privacy and security provide a stronger foundation for ETH’s value than efforts to maximize the amount destroyed through fees.
What fee burning does—and does not establish
Ethereum’s EIP-1559 upgrade, introduced in 2021, burns part of every transaction fee, permanently removing that ETH from circulation. New ETH is also issued, so burning does not necessarily mean the overall supply is shrinking.
Buterin said the mechanism “is fine and good” and should remain. However, holders “should not feel sad if fee burn is < 10% of breakeven indefinitely; the value of ETH comes from elsewhere,” he wrote. In this context, breakeven means burning enough ETH to offset new issuance.
The distinction is between a supply mechanism and a valuation argument: keeping the burn does not require making it the primary reason to hold ETH.
Why Buterin questioned a burn-based valuation floor
Fee burning helped underpin the “ultrasound money” thesis that became popular among ETH holders during the 2021 bull market. Buterin described a model in which a token’s market capitalization equals its annual burn divided by a discount rate. Under that model, burning $1 billion annually at a 4% discount rate would imply a $25 billion valuation floor.
“But here’s the problem: this was never a true floor,” he wrote.
His objection was that much of the ETH burned between 2021 and 2023 came from crypto-internal activity. If that activity and its revenue declined alongside ETH’s price, the supposed support for its valuation could weaken at the same time.
Buterin cited a sale that burned $180 million in fees in one 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 transaction fees of up to $10,000; the report said those NFTs were selling for around $150 at publication.
According to The Block’s data, Ethereum burned about 1.48 million ETH, worth roughly $3.6 billion, in 2022, compared with approximately 19,200 ETH, or $43 million, during 2026 up to the report’s publication.
Buterin said the growing market for tokenized real-world assets gives Ethereum a better claim to revenue backed by activity outside crypto. But he also said a “normal stable mature business” would be unlikely to generate the same exceptional fee spikes.
The costs of optimizing for more burn
Buterin argued that sustaining 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 put ETH’s market capitalization at $273.3 billion that Sunday morning.
Citing 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.” His comparison instead implied in-protocol funding of about 700,000 ETH a year, cutting validator revenue by two-thirds. These were figures in his argument, not an adopted funding plan.
Foundation funding was already contentious, The Block reported. It cited criticism of the Ethereum Foundation’s ETH sales, including 20,000 ETH sold to Bitmine for about $47 million over two weeks in April and May. The foundation had begun staking part of its treasury earlier in 2026 and published a March mandate describing itself as “one of many stewards” of Ethereum. Amid senior staff departures in May, Buterin said it would become “a smaller ship,” selling less ETH and concentrating on work that “would not happen otherwise.”
Beyond spending, Buterin said optimizing for burn would require “highly interventionist governance, for the long term.” He considered that incompatible with his goals for decentralization and resistance to capture. Pursuing higher fees could also price out users, including people who most need privacy and security.
A store-of-value case built around survival
A store of value is something held to preserve value over time. Buterin’s position was a thesis about ETH—not a guarantee that its price will hold up.
For someone holding ETH on that basis, he described the first and most important metric as “to survive.” He linked that goal to Ethereum’s work on post-quantum security, limiting changes to parts of the base layer, and maintaining a high threshold for adding new built-in operations or protocol rewards.
He also pointed to multisignature wallets, the Kohaku privacy project, the FOCIL censorship-resistance proposal and lightweight nodes. As an example, he said his laptop node synchronized in under six hours and occupied “only 1/8 of my hard drive.”
Buterin said people most often tell him they value Ethereum’s decentralization and what he calls CROPS: censorship and capture resistance, open source, privacy and security. He argued that stability would become particularly valuable amid disruption from AI.
Assets issued natively on Ethereum’s base layer, including real-world assets, could reinforce the store-of-value case by expanding what holders can do with ETH—for example, using it as collateral. That is a claim about utility, not a promise of returns.
A separate proposal to burn validator rewards had been withdrawn
The discussion followed the withdrawal, about five weeks earlier, of EIP-8363 from consideration for the forthcoming Hegota upgrade. That proposal would have burned a rising share of validator rewards as more ETH was staked. It cited concerns about the risk a high staking ratio posed to “ETH’s role as money.”
SharpLink CEO Joseph Chalom and Aave founder Stani Kulechov opposed the proposal. Its authors planned a separate issuance process running through EthCC in April. The Block reported that Hegota would follow the delayed Glamsterdam hard fork; Buterin had said in September that Hegota would likely be Ethereum’s last “normal” fork as he outlined a roadmap through 2030.
Solana co-founder Anatoly Yakovenko supported Buterin’s central point, saying that “you can’t focus on fees as the product.” MetaLeX attorney Gabriel Shapiro and Moonrock Capital founder Simon Dedic also welcomed the thread, with Dedic framing the store-of-value narrative as attractive to institutional capital. Those reactions were opinions, not evidence of future performance.
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.
The core distinction: Buterin supported retaining ETH’s fee burn while arguing that Ethereum’s durability and usefulness—not maximizing tokens destroyed—should anchor its store-of-value case.