Ethereum co-founder Vitalik Buterin argued that ETH’s store-of-value role offers a stronger basis for its valuation than maximizing transaction-fee burns, according to The Block’s report published on November 8, 2026, at 23:51:15 UTC+8.
His argument was not to remove EIP-1559. Rather, it was to distinguish a useful supply mechanism from the broader purpose of the network—and to question the costs of making token destruction Ethereum’s primary objective.
Fee burning can remain without becoming the target
EIP-1559, introduced in 2021, burns part of every Ethereum transaction fee. That reduces supply relative to what it would otherwise have been, but does not necessarily offset new ETH issuance.
Buterin described the mechanism as “fine and good” and said Ethereum should retain it. However, he argued that holders “should not feel sad if fee burn is < 10% of breakeven indefinitely; the value of ETH comes from elsewhere.”
The distinction matters for token economics: retaining a burn mechanism is not the same as committing to enough fee revenue to balance issuance. Buterin’s position was that Ethereum should prioritize decentralization, censorship and capture resistance, privacy, security and stability rather than optimize for a particular burn outcome.
Why a burn-based valuation is not necessarily a floor
Fee burning helped underpin the “ultrasound money” thesis that gained traction during the 2021 bull market. Buterin illustrated its valuation logic with a hypothetical calculation: $1 billion in annual token burns divided by a 4% discount rate produces a $25 billion valuation.
His objection was to treating that result as a dependable floor. Much of Ethereum’s fee revenue in 2021–2023, he said, came from crypto-internal activity that could weaken alongside ETH’s price. If the activity generating burns declines when the token falls, the assumed revenue backing is not independent of the asset being valued.
“The floor argument only works if the backing of the revenue stream is external,” he wrote.
Buterin referred to a “digital monkey sale” that burned $180 million in fees in one day. The Block clarified that the event was actually Yuga Labs’ Otherdeed digital-land sale for the Otherside metaverse. Users paid as much as $10,000 in transaction fees for NFTs that, at the time of the report, sold for around $150.
According to The Block’s data cited in the article, Ethereum burned about 1.48 million ETH, worth roughly $3.6 billion, in 2022, compared with approximately 19,200 ETH, or $43 million, during 2026 through the report’s publication.
Buterin said growing tokenized real-world asset activity gives Ethereum a stronger claim to externally backed demand. He cautioned, however, that a “normal stable mature business” is unlikely to generate the same extreme fee spikes.
The spending and governance trade-offs
Buterin put ETH’s market capitalization at about $270 billion and compared the demands of supporting that valuation through fee burning alone with those facing a large company such as L’Oréal. The Block recorded ETH’s market capitalization at $273.3 billion on the Sunday morning covered by the report.
Citing an AI estimate, Buterin said L’Oréal spends about 0.58% of its market capitalization annually on research and development. Matching that rate, he argued, would “bankrupt the [Ethereum Foundation] almost immediately.” His alternative illustration involved about 700,000 ETH a year in protocol-level funding, cutting validator revenue by two-thirds. These were comparisons supporting his argument, not an announced funding change.
He also argued that maximizing burns would require “highly interventionist governance, for the long term,” conflicting with Ethereum’s decentralization and resistance to capture. Pursuing greater fee burns would, to some extent, mean pursuing higher gas prices—potentially excluding users who most need privacy and security.
The spending comparison came amid existing scrutiny of the Ethereum Foundation. The Block reported that the foundation sold 20,000 ETH worth about $47 million to Bitmine over two weeks in April and May 2026. It also began staking part of its treasury earlier that year. Its March mandate described it as “one of many stewards” of Ethereum; amid senior staff departures in May, Buterin said it would become “a smaller ship,” sell less ETH and focus on work that “would not happen otherwise.”
A store-of-value thesis centered on survival and utility
For an investor treating ETH as a store of value, Buterin called survival “the first and most important SoV-ish metric.” He linked that priority to post-quantum security, partial ossification of Ethereum’s base layer and a high threshold for adding new precompiles or in-protocol rewards.
He also highlighted multisig wallets, the Kohaku privacy project, the FOCIL censorship-resistance proposal and lightweight nodes. As an example of accessibility, he said his laptop node synced in under six hours and occupied one-eighth of his hard drive.
In this framework, assets issued natively on Ethereum’s base layer—including real-world assets—can complement ETH’s store-of-value role by expanding its uses, such as collateral. That is a utility-based argument, rather than a promise that lower supply or greater asset issuance guarantees higher value.
Buterin described Ethereum as a hybrid architecture combining blockchains and modern cryptography. In September 2026, he had outlined a roadmap through 2030 and said the upcoming Hegota upgrade was likely to be its last “normal” fork.
Validator-reward burn proposal had already been withdrawn
The discussion followed a separate dispute over issuance incentives. About five weeks before the report, the co-authors of EIP-8363 withdrew the proposal from consideration for Hegota, which was scheduled to follow the delayed Glamsterdam hard fork.
EIP-8363 would have burned a rising share of validator rewards as more ETH was staked. Its authors cited risks that a high staking ratio could pose to “ETH’s role as money.” SharpLink CEO Joseph Chalom and Aave founder Stani Kulechov opposed it. The authors planned a separate issuance process running through EthCC in April.
That withdrawn proposal concerned validator rewards, whereas EIP-1559 concerns transaction fees. Buterin’s support for keeping transaction-fee burning should not be read as an adoption of the withdrawn reward-burning mechanism.
His thread drew support from Solana co-founder Anatoly Yakovenko, who agreed that fees should not be the product. MetaLeX attorney Gabriel Shapiro called it a “‘nature is healing’ moment,” while Moonrock Capital founder Simon Dedic argued that a store-of-value narrative would appeal to institutional capital. Those were reactions, not evidence of future demand or returns.
At the report’s cited market snapshot—9:23 a.m. ET on November 8, 2026—ETH traded at $2,236, down 0.3% on the day.