Vitalik Buterin: ETH is a Store of Value, Not a Burn Token

Ethereum co-founder Vitalik Buterin argued on Nov. 8 that ETH makes more sense as a store of value than as a fee-burning token. In an X thread that opened with a post viewed 1.3 million times, he said the fee-burn case "never was as strong as it seemed." ETH traded at about $2,113 on Monday, down 5.64% over 24 hours, with a market cap of $259.96 billion.

Why the burn case is weaker than it looked

Buterin started from the standard valuation model: market cap equals fees burned divided by a discount rate. If $1 billion is burned each year and the discount rate is 4%, the model implies a $25 billion floor. Anyone could buy the asset below that level and beat the market.

He said the floor was never real. Most of the burn in 2021 to 2023 came from activity inside crypto, so a 10x drop in ETH would have cut that revenue too, because buyers would have had far less money to spend. The argument only holds when the revenue comes from outside the system. Buterin said the growing tokenized real-world asset economy gives Ethereum a better claim to that today.

He still wants the mechanism kept. "EIP-1559 (including its burn) is fine and good, we should keep them," he wrote. He added:

"But we should not feel sad if fee burn is < 10% of breakeven indefinitely; the value of ETH comes from elsewhere."

EIP-1559 went live in the London upgrade in August 2021 and destroys the base fee on every transaction. Breakeven means the burn matches new ETH issued to validators. Etherscan data show the daily amount of ETH burned has fallen steadily since 2025. Ethereum's March 2024 Dencun upgrade also pushed fees on layer 2 networks lower, which reduced how much those networks pay to the main chain.

What maximizing fees would cost

Buterin's second argument is about price. To justify a market cap of roughly $270 billion through burns, he said, Ethereum would have to behave like a large corporation, somewhere near L'Oreal in the global rankings. Companies at that scale spend heavily and make opinionated product decisions.

He used an AI estimate that L'Oreal spends about 0.58% of its market cap each year on research and development. For Ethereum that would mean in-protocol funding of about 700,000 ETH a year, and validator revenue would fall by two-thirds. At the current price, 700,000 ETH is worth roughly $1.5 billion. He also warned that chasing burn means favoring higher gas prices, which can price out users who need privacy and security most.

The store-of-value alternative

Buterin says people most often name decentralization and CROPS, which stands for censorship and capture resistance, open source, privacy and security, as what they value in Ethereum. For a holder who sees ETH as a store of value, he said, the first test is to survive.

He tied that to this year's Devcon themes of "post-quantum and post-AI" and to conservative design choices. He pointed to work on safer multisig wallets, the Kohaku privacy effort and FOCIL, which is meant to guarantee that block builders cannot stop a valid transfer. He also noted that he can run a node on his laptop, that it synced in under six hours and that it uses one-eighth of his hard drive.

Adoption still matters in his view. The more assets issued natively on Ethereum, the more a holder can do with ETH, including using it as collateral. He said some conflicts with decentralization remain, such as fast slots, but far fewer than a fee-maximizing strategy would create. He called stability something that will be "highly valued" in the era of AI disruption.

Reaction and a second post

Solana co-founder Anatoly Yakovenko and Dragonfly's Haseeb Qureshi backed the view.

The debate has financial weight. Bitmine Immersion Technologies said on Nov. 2 that it holds 6,060,506 ETH, about 4.9% of supply, and ETH is more than 40% below its all-time high of about $4,950. How the market justifies ETH's price matters to large holders as well as to developers.

Buterin posted separately on Nov. 8 about AI infrastructure. He said he did not share the "strong emotional reaction" against anti-data-center movements. He argued that algorithmic progress means whatever more data centers could do in two years, existing ones could do in four. In his words, "a slowdown in compute hyper-scaling seems quite net good?"

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