Ethereum’s fee-burning mechanism should remain in place, but it should not be the foundation of ETH’s valuation, according to Vitalik Buterin. His alternative emphasis is ETH as a store of value, supported by Ethereum’s decentralization, security and ability to survive over the long term.
That distinction is central to the report published by PANews on November 9, 2026, at 16:05 China Standard Time (UTC+8), credited to Zack Abrams of The Block and translated by Saoirse of Foresight News. It describes a post Buterin published on X at 8 p.m. Beijing time on Sunday. The figures and development plans below reflect that report’s historical context, not current market conditions.
What fee burning can—and cannot—tell investors
EIP-1559, introduced in 2021, burns a portion of transaction fees. Buterin said the mechanism works well and should be retained, even when burning offsets only part of new ETH issuance. He argued that holders need not be disappointed even if the burn rate remains below 10% of the level needed to offset issuance over the long term: ETH can derive value from other sources.
The valuation model he challenged is straightforward:
Implied token market capitalization = annual value burned ÷ discount rate.
At an annual burn of $1 billion and a 4% discount rate, the model produces a theoretical valuation floor of $25 billion. The problem, Buterin argued, is whether the underlying demand can support that floor independently of the token’s price.
Much of the ETH burned between 2021 and 2023 came from activity within the crypto economy. If that activity contracts alongside ETH’s price, the burn value also weakens. In his view, a durable floor requires fee-generating demand from the external, real-world economy rather than predominantly crypto-native demand.
The report illustrates this with Yuga Labs’ Otherside land sale, which generated $180 million in fee burns in a single day. Buyers of Otherdeed NFTs paid transaction fees reaching more than $10,000; the report put the NFTs’ market price at approximately $150 at publication.
Buterin said the growth of tokenized real-world assets gives Ethereum a stronger external demand base. However, he characterized these activities as more mature and steady, making them less likely to reproduce earlier fee spikes.
According to The Block data cited in the article:
- Ethereum burned approximately 1.48 million ETH, worth about $3.6 billion, in 2022.
- By the report’s 2026 year-to-date cutoff, it had burned approximately 19,200 ETH, worth $43 million.
These are measures of token destruction, not by themselves proof of a sustainable valuation floor.
The operating-cost problem with a corporate analogy
Buterin also questioned what Ethereum would need to look like if fee burning alone were expected to support a market capitalization of roughly $270 billion. The Block’s market page placed ETH’s capitalization at $273.3 billion on Sunday morning, according to the report.
He compared that proposition with a large company such as L’Oréal, which must spend substantially to maintain its competitive position. Citing an AI-generated estimate, he said L’Oréal spends approximately 0.58% of its market capitalization annually on research and development. The report did not present that estimate as an independently verified corporate figure.
Applying the same spending ratio to Ethereum, he argued, would exhaust the Ethereum Foundation’s resources almost immediately. Funding the expenditure through protocol-level allocations would instead require approximately 700,000 ETH a year, cutting validator earnings by two-thirds in his illustration.
The comparison highlights a limit of the burn-based argument: valuing the asset through fee destruction does not eliminate the cost of maintaining the network’s competitiveness.
The report also noted existing disputes over the Foundation’s treasury management. In April–May 2026, it sold 20,000 ETH, worth approximately $47 million, to Bitmine over two weeks. In May, Buterin said he frequently heard complaints that the Foundation’s actions did not match its public commitments.
Earlier in 2026, the Foundation began staking part of its treasury to earn returns. A March document defining its responsibilities positioned it as one of the network’s many stewards. Amid several core staff departures in May, Buterin said it would streamline its structure, reduce ETH sales and concentrate on public infrastructure that other organizations were unwilling to support.
Network durability as the store-of-value test
Buterin argued that optimizing Ethereum for token burning would require highly interventionist governance, conflicting with decentralization and resistance to capture. Prioritizing burns would also, to some extent, mean prioritizing higher gas fees—raising barriers for users, including people who particularly need privacy and security.
Instead, he emphasized the qualities community members most often told him they valued: decentralization and CROPS, his shorthand for censorship and capture resistance, open source, privacy and security.
For investors treating ETH as a store of value, he described the network’s capacity to endure as the first and most important measure. He also argued that stability would become especially valuable amid disruption from artificial intelligence.
The technical priorities he linked to that objective included:
- Post-quantum security and selective stabilization of the base protocol.
- Higher thresholds for introducing new precompiles or protocol rewards.
- Multisignature wallets, the Kohaku privacy project, the FOCIL censorship-resistance proposal and light clients.
Buterin also said he ran a node on his laptop, synchronizing it in under six hours while using one-eighth of its disk space.
He viewed growth in assets native to Ethereum’s base layer, including tokenized real-world assets, as complementary to ETH’s store-of-value role because it broadens uses such as collateral. That is a different argument from assuming every increase in network activity necessarily translates into greater fee burns.
The report also recalled his September 2026 roadmap extending through 2030. Buterin described Ethereum as a hybrid of blockchain technology and modern cryptography and suggested that the forthcoming Hegota upgrade would probably be its last conventional hard fork.
Industry support and the staking-burn debate
Solana co-founder Anatoly Yakovenko agreed that fees should not be treated as the core product. MetaLeX lawyer Gabriel Shapiro called the post a moment of renewed industry rationality. Moonrock Capital founder Simon Dedic described the store-of-value narrative as Ethereum’s strongest bullish case and the easiest to explain to institutional capital. These were their assessments, not valuation findings established by the report.
The discussion followed the withdrawal, five weeks before Buterin’s post, of EIP-8363 by several co-authors. They removed it from consideration for Hegota, which the report said would follow the delayed Glamsterdam hard fork.
The proposal would have progressively increased the share of validator rewards burned as ETH staking increased. Its proponents argued that excessive staking threatened ETH’s monetary properties. SharpLink CEO Joseph Chalom and Aave founder Stani Kulechov opposed it. The authors planned a separate discussion around an April EthCC conference; the supplied report did not specify the year.
The distinction in Buterin’s argument is between a measurable mechanism and a valuation conclusion: fee burning reduces supply, but its dollar value depends on the source and persistence of demand. His proposed store-of-value framework instead emphasizes network durability and utility. The report supplies no fair-value target or quantified model translating those qualities into an ETH price.