Source publication time: November 8, 2026, at 23:51:15 UTC+8. This article reflects the reporting and market figures in that dated source.
Vitalik Buterin argued that Ethereum should prioritize ETH’s role as a store of value rather than try to justify its valuation by maximizing token burns. His argument challenges a central premise of the “ultrasound money” narrative: that transaction-fee destruction provides a dependable floor beneath ETH’s market value.
According to The Block’s original report, the Ethereum co-founder supported retaining EIP-1559, the 2021 upgrade that burns part of each transaction fee. But he rejected the idea that the network should organize its priorities around increasing that burn.
“We should not feel sad if fee burn is < 10% of breakeven indefinitely; the value of ETH comes from elsewhere,” he wrote on X.
Why a burn-based valuation floor can fail
Buterin described a model in which a token’s market capitalization equals its annual burn divided by a discount rate. At $1 billion in annual burns and a 4% discount rate, that calculation produces a $25 billion valuation.
The weakness, he argued, is the durability of the revenue behind the burn. Much of Ethereum’s fee destruction between 2021 and 2023 came from “crypto-internal use cases.” If demand for those activities falls alongside ETH’s price, the supposed support can weaken precisely when holders expect it to matter.
“The floor argument only works if the backing of the revenue stream is external,” he wrote.
Buterin cited a speculative sale that burned $180 million in fees in a single day. The Block clarified that the event was the Otherdeed digital-land sale for Yuga Labs’ Otherside metaverse—not directly a sale of Bored Ape NFTs. Some users paid up to $10,000 in transaction fees for Otherdeed NFTs that, at the time of the report, sold for around $150.
The Block’s data showed Ethereum burning 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 reporting date.
Buterin said tokenized real-world assets give Ethereum a stronger claim to externally supported activity. He nevertheless cautioned that a mature, stable business is unlikely to generate the same extraordinary fee spikes.
Maximizing burns carries costs
Buterin also questioned what Ethereum would have to become to support its roughly $270 billion market capitalization through fee burn alone. The Block put ETH’s capitalization at $273.3 billion on the Sunday morning covered by the report.
Using an AI-generated estimate that L’Oréal spends about 0.58% of its market capitalization annually on research and development, he argued that comparable spending would “bankrupt” the Ethereum Foundation almost immediately. His alternative calculation implied protocol funding of approximately 700,000 ETH annually, reducing validator revenue by two-thirds. The corporate comparison rested on an estimate, not a verified spending benchmark established by the report.
He argued that maximizing burns would also require long-term, interventionist governance and, to some degree, higher gas prices. Those priorities 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 Ethereum Foundation ETH sales, including 20,000 ETH worth about $47 million sold to Bitmine over two weeks in April and May. The foundation had begun staking part of its treasury earlier in 2026; in May, Buterin said it would become a “smaller ship” that sold less ETH and concentrated on work that otherwise would not happen.
A different narrative, not a demonstrated valuation
Buterin’s preferred case emphasizes survival, stability and what he calls CROPS: censorship and capture resistance, open source, privacy and security.
He connected those goals to post-quantum security, partial ossification of the base layer and a high threshold for new protocol features or rewards. He also cited 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 uses for ETH, such as collateral, he argued.
The distinction matters: identifying a weakness in the burn-based valuation model does not itself establish a valuation for the replacement narrative. Buterin offered reasons to prioritize resilience and utility, not evidence of a guaranteed price floor.
Support—and a recent dispute over issuance
Solana co-founder Anatoly Yakovenko agreed that fees should not be treated as the product. MetaLeX attorney Gabriel Shapiro welcomed the thread, while Moonrock Capital founder Simon Dedic described the store-of-value framing as a major bullish case and an easy story to sell to institutional capital. Those responses were endorsements, not independent validation of ETH’s value.
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; its authors planned a separate issuance process running through EthCC in April.
At the source’s quoted market snapshot—9:23 a.m. ET—ETH traded at $2,236, down 0.3% on the day.