Source published November 8, 2026, at 23:51:15 UTC+8. All market figures and relative time references below reflect that report.
Ethereum co-founder Vitalik Buterin argues that ETH’s investment case should center on its durability as a store of value, rather than on maximizing transaction-fee destruction. His distinction is not an argument to remove fee burning: he supports retaining EIP-1559, the 2021 upgrade that burns part of every transaction fee. Instead, he questions whether burn can establish a dependable valuation floor—and whether optimizing for it would undermine Ethereum’s purpose.
In an X thread reported by The Block, Buterin wrote that holders “should not feel sad if fee burn is < 10% of breakeven indefinitely; the value of ETH comes from elsewhere.” Here, breakeven refers to burning enough ETH to offset new issuance.
Why fee burn is not necessarily a valuation floor
Buterin outlined a simple capitalization model: divide annual token burn by a discount rate. Burning $1 billion annually at a 4% discount rate would imply a $25 billion valuation.
The weakness, he argued, is the assumption that the revenue supporting that burn remains available when the token’s price falls. Much of Ethereum’s burn from 2021 through 2023 came from “crypto-internal use cases,” whose activity and revenue could decline alongside ETH’s price. A revenue stream exposed to the same downturn as the asset does not provide an independent floor.
Buterin cited a speculative sale that burned $180 million in fees in one day. The Block clarified that this was the Otherdeed digital-land sale for Yuga Labs’ Otherside metaverse, rather than a sale of digital monkeys. Participants paid transaction fees of up to $10,000; the report placed Otherdeed NFT prices at around $150 at publication.
The Block’s burn data illustrated the change in activity:
- 2022: approximately 1.48 million ETH burned, worth roughly $3.6 billion.
- 2026 through the report’s publication: approximately 19,200 ETH burned, worth roughly $43 million.
Buterin said tokenized real-world assets give Ethereum a stronger claim to externally backed activity. However, he also argued that a stable, mature business is unlikely to generate the extreme fee spikes associated with speculative events.
The operational cost of optimizing for burn
Buterin’s second objection concerns what Ethereum would need to become to sustain a fee-based valuation.
He compared ETH’s approximately $270 billion market capitalization with a company such as L’Oréal. The Block separately reported ETH’s market capitalization at $273.3 billion that Sunday morning.
Citing an AI-generated estimate, Buterin said L’Oréal spends around 0.58% of its market capitalization annually on research and development. This was an input to his analogy, not an independently established benchmark in the supplied report. He argued that matching that spending rate would overwhelm the Ethereum Foundation’s resources and instead require approximately 700,000 ETH annually in protocol funding, reducing validator revenue by two-thirds.
He also argued that maximizing burn would require long-term, “highly interventionist governance” and, to some extent, higher gas prices. Those choices could conflict with decentralization and capture resistance while pricing out users—including people who particularly need privacy and security.
The funding question already had a contentious backdrop. The Block reported criticism of the foundation’s ETH sales, including 20,000 ETH worth about $47 million sold to Bitmine over two weeks in April and May 2026. The foundation had begun staking part of its treasury that year. In May, Buterin described its intended direction as a “smaller ship” that sells less ETH and concentrates on work that “would not happen otherwise.”
Survival as the store-of-value test
Buterin identified decentralization and CROPS—censorship and capture resistance, open source, privacy and security—as central to Ethereum’s value. For someone holding ETH as a store of value, he described survival as the first and most important metric.
He connected that objective to post-quantum security, partial ossification of the base layer, and a high threshold for introducing new precompiles or in-protocol rewards. Examples of relevant work included multisig wallets, the Kohaku privacy project, the FOCIL censorship-resistance proposal and lightweight nodes.
These were examples supporting his argument, not evidence that every proposal had been implemented. His node-performance example was also personal: he said his laptop node synchronized in under six hours and occupied one-eighth of its hard drive.
Buterin further argued that assets issued natively on Ethereum’s base layer, including real-world assets, complement the store-of-value thesis by expanding ETH’s uses, such as collateral.
A valuation argument, not a replacement valuation model
The thread appeared about five weeks after the authors of EIP-8363 withdrew it 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. It faced opposition from SharpLink CEO Joseph Chalom and Aave founder Stani Kulechov; its authors planned a separate issuance process running through EthCC in April.
Solana co-founder Anatoly Yakovenko supported Buterin’s distinction, saying that “you can’t focus on fees as the product.”
The central analytical limit remains important: challenging burn as a reliable valuation floor does not establish a numerical store-of-value valuation. Buterin’s argument instead identifies the properties he believes Ethereum should preserve—durability, credible neutrality and secure utility—rather than treating higher fees as the protocol’s objective.