Original report published by The Block on November 8, 2026, at 23:51:15 UTC+8. Prices and year-to-date figures below reflect that report’s timeframe.
Ethereum co-founder Vitalik Buterin argued that ETH’s investment case should center on its role as a store of value rather than on maximizing transaction-fee burns. In a Sunday morning thread on X, he said pursuing greater burns could require spending and governance choices at odds with Ethereum’s decentralization, censorship resistance and privacy goals.
Buterin supported retaining EIP-1559, the mechanism introduced in 2021 that burns part of every transaction fee. But he rejected the idea that its success should depend on consistently offsetting new ETH issuance.
“We should not feel sad if fee burn is < 10% of breakeven indefinitely; the value of ETH comes from elsewhere,” he wrote.
Why he questioned the fee-burn valuation model
Fee burning helped underpin the “ultrasound money” thesis that gained traction during the 2021 bull market. Buterin described a valuation model in which a token’s market capitalization equals its annual burn divided by a discount rate: burning $1 billion annually at a 4% discount rate would imply a $25 billion valuation floor.
His objection was that the revenue supporting that supposed floor was not independent of crypto markets. He said much of Ethereum’s burn from 2021 through 2023 came from “crypto-internal use cases,” whose revenue could decline alongside ETH’s price.
As an example, he cited a sale that burned $180 million in fees in one day. The Block clarified that the event was Yuga Labs’ Otherdeed digital-land sale for the Otherside metaverse, rather than a sale of Bored Ape NFTs themselves. Some users paid up to $10,000 in transaction fees; the report put Otherdeed NFT prices at around $150 at publication.
Tokenized real-world assets give Ethereum a stronger claim to externally backed activity, Buterin said. However, he argued that a mature business of that kind would be unlikely to generate comparable fee spikes.
According to The Block’s data, Ethereum burned about 1.48 million ETH, worth roughly $3.6 billion, in 2022. That compared with approximately 19,200 ETH, or $43 million, during 2026 up to the report’s publication.
The spending and governance trade-offs
Buterin put ETH’s market capitalization at about $270 billion and compared a burn-based valuation case with that of a large company such as L’Oréal. The Block separately recorded ETH’s market capitalization at $273.3 billion that Sunday morning.
Citing an AI estimate that L’Oréal spends roughly 0.58% of its market capitalization on research and development annually, Buterin said matching that rate would “bankrupt the [Ethereum Foundation] almost immediately.” He estimated that funding it through the protocol instead would require about 700,000 ETH a year and reduce validator revenue by two-thirds.
That comparison was an argument about potential costs, not an announced funding plan. Buterin also said maximizing burns would require sustained, “highly interventionist governance” and, to some extent, higher gas prices. Those prices could exclude users who particularly need privacy and security, he warned.
The discussion came against a backdrop of scrutiny of Ethereum Foundation funding. The Block reported that the foundation sold 20,000 ETH worth about $47 million to Bitmine over two weeks in April and May. It also began staking part of its treasury earlier in 2026. Amid senior staff departures in May, Buterin said it would become “a smaller ship,” sell less ETH and concentrate on work that otherwise would not happen.
Resilience as the store-of-value test
For Buterin, the first store-of-value test is survival. He said users most often value Ethereum’s decentralization and what he calls CROPS: censorship and capture resistance, open source, privacy and security.
He linked those priorities to post-quantum security, partial ossification of the base layer and a high threshold for introducing new precompiles or protocol-level 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, including real-world assets, could complement that thesis by expanding uses for ETH, such as collateral, he argued.
A separate burn proposal had already been withdrawn
The thread appeared about five weeks after EIP-8363’s co-authors withdrew it from consideration for Hegota, the upgrade scheduled to follow the delayed Glamsterdam hard fork. The proposal would have burned a growing share of validator rewards as more ETH was staked, citing risks that a high staking ratio could pose 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.
Solana co-founder Anatoly Yakovenko supported Buterin’s broader argument, saying he was “absolutely right that you can’t focus on fees as the product.”
The Block reported ETH at $2,236 as of 9:23 a.m. ET, down 0.3% on the day. That price snapshot does not establish any market reaction to the thread.