Ethereum co-founder Vitalik Buterin argued on November 8, 2026, that ETH’s valuation case should center on its role as a store of value—not on maximizing the amount of ETH destroyed through transaction fees.
In an X thread reported by The Block, he supported keeping EIP-1559, the 2021 upgrade that burns part of every transaction fee. But he rejected the idea that the mechanism must offset new issuance to underpin ETH’s value.
“We should not feel sad if fee burn is < 10% of breakeven indefinitely; the value of ETH comes from elsewhere,” he wrote.
The distinction matters for a narrative that gained traction during the 2021 bull market: that fee destruction could provide a valuation floor for ETH.
Why the burn-based ‘floor’ depends on the cycle
Buterin illustrated the fee-burning valuation model with a hypothetical: a token burning $1 billion annually, valued using a 4% discount rate, would have an implied valuation of $25 billion.
The weakness, he argued, is that the revenue supporting that calculation may decline alongside the token’s price. Much of Ethereum’s burn from 2021 through 2023 came from “crypto-internal use cases,” rather than demand backed by activity outside the crypto market.
“The floor argument only works if the backing of the revenue stream is external,” he wrote.
He cited a speculative sale that burned $180 million in fees in one day. The Block clarified that the event was Yuga Labs’ sale of Otherdeed NFTs representing land in the Otherside metaverse—not directly a sale of digital monkeys, as Buterin’s shorthand suggested. Some buyers paid up to $10,000 in transaction fees; the report said those NFTs were selling for around $150 at publication.
The Block’s data showed how much the burn had changed: Ethereum burned about 1.48 million ETH in 2022, worth roughly $3.6 billion, compared with about 19,200 ETH, or $43 million, in 2026 through the report’s publication.
Buterin said growing tokenized real-world asset activity gives Ethereum a better claim to externally supported demand. The difference from the earlier speculative cycle is important, however: a “normal stable mature business” is unlikely to generate comparable fee spikes, he said.
Maximizing burn carries costs
Buterin also questioned what Ethereum would need to spend to sustain a valuation based on fee revenue alone.
Using an ETH market capitalization of about $270 billion, he compared the network with a company such as L’Oréal. Citing an AI estimate, he said L’Oréal spends roughly 0.58% of its market capitalization annually on research and development. Matching that rate, he argued, would exhaust the Ethereum Foundation’s resources almost immediately and instead require around 700,000 ETH a year in protocol-level funding, cutting validator revenue by two-thirds.
That was a hypothetical comparison, not an adopted funding plan. The Block put ETH’s actual market capitalization at $273.3 billion that Sunday morning.
Foundation funding was already contentious. The report noted criticism of its ETH sales, including a sale of 20,000 ETH worth about $47 million to Bitmine over two weeks in April and May 2026. The foundation had also begun staking part of its treasury earlier that year. Amid senior staff departures in May, Buterin said it would become “a smaller ship,” sell less ETH and concentrate on work that would not otherwise happen.
Beyond spending, he argued that a burn-maximizing strategy would require prolonged, interventionist governance. It would also mean favoring higher gas prices to some extent, potentially excluding users who most need privacy and security. He viewed those trade-offs as incompatible with decentralization and resistance to capture.
The alternative: survival and utility
For ETH held as a store of value, Buterin called survival the first and most important metric. He emphasized decentralization, censorship and capture resistance, open source, privacy and security—principles he groups under the acronym CROPS.
He connected that approach to post-quantum security, partial ossification of Ethereum’s 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.
Assets issued natively on Ethereum, including real-world assets, could reinforce the store-of-value case by expanding ETH’s uses, such as collateral, he argued. That is a thesis about durability and utility, rather than a promise of price appreciation.
Support for the argument, not proof of a market turn
Solana co-founder Anatoly Yakovenko supported the distinction, saying that fees cannot be the product. MetaLeX attorney Gabriel Shapiro also welcomed the thread. Moonrock Capital founder Simon Dedic described the store-of-value narrative as a potential bull case and an easier story to present to institutional capital; that was his assessment, not evidence of institutional inflows.
The discussion came about five weeks after the authors of EIP-8363 withdrew it from consideration for the forthcoming Hegota upgrade. The proposal would have burned an increasing share of validator rewards as staking rose. It faced opposition from SharpLink CEO Joseph Chalom and Aave founder Stani Kulechov.
ETH traded at $2,236 at 9:23 a.m. ET on November 8, 2026, down 0.3% on the day, according to The Block. The report did not establish that Buterin’s comments caused that move.
Original publication: November 8, 2026, at 23:51:15 UTC+08:00. Source: The Block.
