Source report published by The Block on November 8, 2026, at 23:51:15 UTC+08:00.
Vitalik Buterin’s argument for ether’s value puts Ethereum’s durability ahead of its ability to destroy tokens through transaction fees. In an X thread reported by The Block, the Ethereum co-founder said “ETH as store of value” made more sense as a focus than “ETH as fee-burning token.”
That was not a call to abandon EIP-1559, the 2021 upgrade that burns part of every transaction fee. Buterin described the mechanism as “fine and good.” His objection was to treating the burn as the foundation of ETH’s valuation—or reshaping Ethereum to maximize it.
“We should not feel sad if fee burn is < 10% of breakeven indefinitely; the value of ETH comes from elsewhere,” he wrote.
Why the fee-burn ‘floor’ is conditional
Fee destruction helped underpin the “ultrasound money” narrative that gained traction among ETH holders during the 2021 bull market. Buterin described its valuation logic with a hypothetical: a token burning $1 billion annually, valued at a 4% discount rate, would have a supposed $25 billion valuation floor.
His criticism was that this was never a reliable floor if the activity producing those fees depended on the same crypto market supporting the token’s price. He said most ETH burned from 2021 through 2023 came from “crypto-internal use cases,” whose revenue could decline alongside ETH.
Buterin pointed to a speculative sale that burned $180 million in fees in one day. The Block clarified that the event was Yuga Labs’ Otherdeed NFT sale for land in the Otherside metaverse, rather than the “digital monkey sale” he described. Some buyers paid up to $10,000 in transaction fees; the report put Otherdeed prices at around $150 at publication.
The Block’s data also showed the contraction in burning: approximately 1.48 million ETH, worth roughly $3.6 billion, was burned in 2022, compared with about 19,200 ETH, or $43 million, during 2026 up to the report.
RWA activity offers a different revenue basis—not the same fee spikes
Buterin said the growth of tokenized real-world assets gave Ethereum a “better claim” to revenue backed by activity outside crypto. But he also cautioned that a “normal stable mature business” was unlikely to generate the extraordinary fee spikes associated with speculative events.
That distinction matters to the narrative: a stronger connection to external economic activity does not necessarily mean greater fee destruction. Buterin separately argued that assets issued natively on Ethereum’s base layer, including real-world assets, support the store-of-value case by expanding what holders can do with ETH, such as using it as collateral.
Those are arguments about potential utility and valuation, not adoption measurements supplied by the report.
The costs of optimizing Ethereum like a business
Buterin put ETH’s market capitalization at roughly $270 billion and compared a burn-driven valuation with that of a company such as L’Oréal. The Block recorded ETH’s market capitalization at $273.3 billion on Sunday morning.
Citing an AI estimate—not an independently established spending figure—that L’Oréal spends about 0.58% of its market capitalization annually on research and development, Buterin said comparable spending would “bankrupt the [Ethereum Foundation] almost immediately.” Funding it through the protocol instead would require about 700,000 ETH annually and reduce validator revenue by two-thirds, he argued.
He also said sustained burn optimization would require “highly interventionist governance” and, to some degree, higher gas prices. In his view, those incentives conflict with decentralization and capture resistance, while potentially excluding users who particularly need privacy and security.
The foundation’s funding was already contentious. The Block noted criticism of its ETH sales, including 20,000 ETH sold to Bitmine for about $47 million over two weeks in April and May. It also reported that the foundation had begun staking part of its treasury and that Buterin had described its future as “a smaller ship,” selling less ETH and concentrating on work that would not otherwise happen.
Survival as the store-of-value test
For an investor treating ETH as a store of value, Buterin called survival the first and most important metric. He linked that goal to post-quantum security, partial ossification of the base layer, and a high threshold for adding precompiles or in-protocol rewards.
He also highlighted multisig wallets, the Kohaku privacy project, the FOCIL censorship-resistance proposal and lightweight nodes. These priorities frame Ethereum’s value around resilience and usable infrastructure rather than a target burn rate.
Solana co-founder Anatoly Yakovenko supported the distinction, saying developers cannot focus on fees as the product. Moonrock Capital founder Simon Dedic described the store-of-value framing as a strong institutional investment story; that was his assessment, not evidence of institutional inflows.
The debate followed the withdrawal, about five weeks earlier, of EIP-8363 from consideration for the forthcoming Hegota upgrade. The 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, and its authors planned a separate issuance process running through EthCC in April.
The central distinction in Buterin’s argument is between preserving fee burn as a mechanism and making it Ethereum’s organizing objective. His preferred case rests on the network remaining secure, resistant to capture and useful over time—not on maximizing the amount of ETH destroyed.
