Historical report based on The Block’s article published November 8, 2026, at 23:51:15 UTC+08:00. Prices, year-to-date figures and roadmap references below reflect that reporting context.
Ethereum co-founder Vitalik Buterin argued that ETH’s valuation should rest primarily on its role as a store of value, rather than on how much transaction revenue the network burns. His position was not to abandon fee burning, but to distinguish a useful token mechanism from the network’s overriding objective.
In an X thread reported by The Block, Buterin said Ethereum should retain EIP-1559, the 2021 upgrade that burns part of every transaction fee. However, holders “should not feel sad” if fee burn remains below 10% of the amount needed to offset new issuance indefinitely.
Two valuation approaches, different priorities
The comparison is between two ways of assessing the same asset—not between separate cryptocurrencies.
| Criterion | Fee-burning valuation | Store-of-value case described by Buterin |
|---|---|---|
| Central consideration | Annual token burn relative to valuation | Long-term survival, security and useful properties |
| Supporting activity | Fee-generating transactions, particularly those backed by external demand | A resilient network and assets that expand ETH’s uses, including as collateral |
| Main limitation or trade-off | Crypto-dependent revenue may fall alongside ETH’s price; maximizing burn can favor higher fees | The argument does not establish a numerical valuation floor |
| Network priorities | Sustaining fee revenue | Decentralization, censorship and capture resistance, privacy, and security |
Buterin’s distinction separates Ethereum’s network properties from ETH’s supply mechanics. Fee burning can offset issuance, but he argued that maximizing that offset should not dictate protocol design.
Why Buterin challenged the burn-based valuation floor
The fee-burning mechanism helped underpin the “ultrasound money” thesis popular among ETH holders during the 2021 bull market.
Buterin illustrated the valuation model with a token burning $1 billion annually: at a 4% discount rate, that would imply a $25 billion valuation. But he disputed treating that figure as a dependable floor when the revenue itself depends on crypto-market conditions.
He said most ETH burned from 2021 through 2023 came from crypto-internal activity whose revenue would have declined alongside ETH’s price. As an example, he referenced an event 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. Users paid transaction fees of up to $10,000; the article reported that those NFTs were selling for around $150 at publication.
According to The Block’s data, Ethereum burned approximately 1.48 million ETH, worth roughly $3.6 billion, in 2022. That compared with about 19,200 ETH, or $43 million, during 2026 through the report’s publication.
Buterin said tokenized real-world assets gave Ethereum a stronger claim to externally supported demand. However, he also argued that a mature, stable business was unlikely to generate comparable fee spikes.
The costs of optimizing for burn
Buterin put ETH’s market capitalization at approximately $270 billion and compared a burn-led valuation case with that of a large company such as L’Oréal.
Citing an AI estimate that L’Oréal spends about 0.58% of its market capitalization annually on research and development, he argued that matching that rate would rapidly exhaust the Ethereum Foundation’s resources. His alternative illustration involved approximately 700,000 ETH annually in protocol funding, reducing validator revenue by two-thirds. These were elements of his argument, not adopted protocol changes.
He also said maximizing burn would require sustained interventionist governance and, to some degree, higher gas prices. In his view, those choices conflict with decentralization and capture resistance and could exclude users who particularly need privacy and security.
What supports the store-of-value argument?
For Buterin, the first store-of-value test is survival. He connected that objective to post-quantum security, partial ossification of the base layer, and a high threshold for adding new precompiles or protocol rewards.
He also highlighted multisig wallets, the Kohaku privacy project, the FOCIL censorship-resistance proposal and lightweight nodes. Growth in assets issued natively on Ethereum’s base layer could complement the thesis, he said, by expanding what holders can do with ETH, including using it as collateral.
These are arguments about resilience and utility, not guarantees of price appreciation.
A separate supply proposal had been withdrawn
The discussion followed the withdrawal of EIP-8363 about five weeks before the report. That proposal would have burned an increasing share of validator rewards as more ETH was staked. It drew opposition from SharpLink CEO Joseph Chalom and Aave founder Stani Kulechov.
Its authors withdrew it from consideration for Hegota, the upgrade scheduled to follow the delayed Glamsterdam hard fork, and planned a separate issuance process running through EthCC in April. This proposed validator-reward mechanism was distinct from EIP-1559’s existing transaction-fee burn.
Solana co-founder Anatoly Yakovenko supported Buterin’s central distinction, saying that fees cannot be the product’s focus. That reaction did not amount to a comparison of Ethereum and Solana’s performance or token economics.
At the report’s quoted market snapshot, ETH traded at $2,236 as of 9:23 a.m. ET, down 0.3% on the day.