Vitalik Buterin: Ethereum Should Prioritise Store of Value Over Fee Burn

Ethereum co-founder Vitalik Buterin has argued that the network should emphasise ETH as a store of value rather than focusing on its fee burn mechanism. The ETH fee burn, he stated, "never was as strong as it seemed."

In an X thread, Buterin underscored that the burn mechanism introduced with EIP-1559 ought to remain. "But we should not feel sad if fee burn is < 10% of breakeven indefinitely; the value of ETH comes from elsewhere," the co-founder wrote.

Why the ETH Fee Burn Falls Short

Buterin's reasoning begins with a straightforward valuation model. Under that model, a token's market capitalisation equals the fees burned divided by a discount rate.

Expanding on why I believe "ETH as store of value (SoV)" makes much more sense to focus on than "ETH as fee-burning token".

Three primary reasons:

1. ETH as fee-burning token never was as strong as it seemed
2. Optimizing for ETH as fee-burning token would demand Ethereum and…

— vitalik.eth (@VitalikButerin) November 8, 2026

To support a market cap of roughly $270 billion from burns alone, Ethereum would need to function like a global corporation such as L'Oréal. According to Buterin, that would require approximately 700,000 ETH per year in protocol funding for research and development. Consequently, validator revenue would drop by two-thirds.

Ethereum would also need "highly interventionist governance," the co-founder added. Furthermore, pursuing a higher ETH fee burn would mean pushing gas prices higher. That could push out users who require privacy and security the most.

Stability as Ethereum's Main Selling Point

Instead, Buterin highlights decentralization and CROPS — an acronym for censorship and capture resistance, open source, privacy and security. Unlike the ETH fee burn, these features translate into stability. "And in the era of AI disruption, stability will be highly valued," the co-founder wrote.

For a store of value, the most critical metric is "to survive," Buterin added. That objective aligns with Ethereum's post-quantum roadmap and its goal of at least partial ossification. A growing number of assets issued on Ethereum's main chain would also enhance ETH's utility, he said.

The remarks mark a departure from the "ultrasound money" narrative built around the ETH fee burn. They also arrive amid a contentious debate over the Glamsterdam upgrade, which developers warn could break existing contracts. Earlier, Buterin described Hegota, the upgrade after Glamsterdam, as Ethereum's last "normal" fork.