Source report published by The Block on November 8, 2026, at 23:51:15 UTC+8. Figures and market prices below reflect that report’s timeframe.
Ethereum co-founder Vitalik Buterin argued that ETH’s valuation should rest primarily on its role as a store of value, rather than on the fees the network burns. His distinction is between a measurable supply mechanism and the broader reasons people might want to hold the asset.
In an X thread reported by The Block, Buterin supported retaining EIP-1559, the 2021 upgrade that burns part of every transaction fee. But he rejected the idea that Ethereum should optimize its design around maximizing that burn.
“We should not feel sad if fee burn is < 10% of breakeven indefinitely; the value of ETH comes from elsewhere,” he wrote, referring to burn offsetting only a small portion of new ETH issuance.
The burn model—and why it is not necessarily a floor
Buterin described a simple valuation framework:
Implied token value = annual token burn ÷ discount rate
Under his example, $1 billion of annual burn divided by a 4% discount rate produces a $25 billion valuation. The difficulty is treating that result as a dependable floor.
According to Buterin, much of Ethereum’s burn during 2021–2023 came from “crypto-internal use cases.” If demand for those activities and their associated fee revenue declined alongside ETH’s price, the revenue stream would not provide independent support for the token’s valuation.
“The floor argument only works if the backing of the revenue stream is external,” he wrote.
He cited an episode that burned $180 million in fees in one day, describing it as a “digital monkey sale.” The Block clarified that the event was the Otherdeed digital-land sale for Yuga Labs’ Otherside metaverse, rather than a sale of Bored Ape NFTs themselves. Users paid up to $10,000 in transaction fees for Otherdeed NFTs, which the report said were trading around $150 at publication.
Buterin said tokenized real-world assets give Ethereum a better claim to externally supported activity. However, he also argued that a mature, stable business of that kind is unlikely to generate the same fee spikes.
The Block’s data illustrated the change in burn:
| Period | ETH burned | Reported dollar value |
|---|---|---|
| 2022 | About 1.48 million ETH | Roughly $3.6 billion |
| 2026, through the report’s publication | About 19,200 ETH | Roughly $43 million |
The second row is a partial-year figure, not a completed annual total. These figures measure token destruction; they do not, by themselves, establish a fair value for ETH.
What a fee-focused strategy could cost
Buterin put ETH’s market capitalization at approximately $270 billion. The Block separately reported $273.3 billion on Sunday morning. He argued that supporting that scale of valuation through fee burn alone would invite comparisons with a large company such as L’Oréal—and with the spending needed to maintain its position.
Citing an AI-generated estimate that L’Oréal spends about 0.58% of its market capitalization annually on research and development, Buterin said matching that rate would “bankrupt the [Ethereum Foundation] almost immediately.” His alternative illustration involved approximately 700,000 ETH of annual in-protocol funding, reducing validator revenue by two-thirds. These were Buterin’s comparisons, not independently established Ethereum funding requirements.
He also argued that maximizing burn would require long-term, “highly interventionist governance” and, to some degree, higher gas prices. In his view, those incentives conflict with decentralization and capture resistance, while potentially pricing out users who most need privacy and security.
The funding discussion came against an already contentious backdrop. The Block reported that the Ethereum 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 that year. Amid senior staff departures in May, Buterin said the foundation would become “a smaller ship,” sell less ETH and focus on work that would not otherwise happen.
The alternative: durability and utility
Buterin’s store-of-value case centers on Ethereum’s decentralization and what he calls CROPS: censorship and capture resistance, open source, privacy and security. For a store-of-value holder, he described the first and most important metric as the ability “to survive.”
He linked that objective to post-quantum security, partial ossification of the 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, he said his laptop node synced in under six hours and occupied one-eighth of its hard drive.
Assets issued natively on Ethereum’s base layer, including real-world assets, could reinforce this case by expanding what ETH holders can do, such as using ETH as collateral, he argued.
This is a change in valuation emphasis, not a numerical valuation model. Buterin’s argument identifies durability, monetary demand and collateral utility as relevant inputs, but does not assign them a dollar value or establish an ETH price target.
The issuance debate remains separate
The thread appeared about five weeks after the authors of EIP-8363 withdrew the proposal from consideration for Hegota, the upgrade scheduled to follow the delayed Glamsterdam hard fork. EIP-8363 would have burned a rising share of validator rewards as more ETH was staked. It drew opposition from SharpLink CEO Joseph Chalom and Aave founder Stani Kulechov. Its authors planned a separate issuance process running through EthCC in April.
Solana co-founder Anatoly Yakovenko supported Buterin’s central distinction, saying that “you can’t focus on fees as the product.”
At 9:23 a.m. ET on the reporting date, ETH traded at $2,236, down 0.3% on the day, according to The Block. That price snapshot is separate from the valuation argument: neither fee burn alone nor a store-of-value narrative establishes what ETH should be worth.