Vitalik Buterin: ETH’s value can’t rest on fee burning
If Ethereum’s value is measured only in ETH burned, are we looking at the wrong metric?
Vitalik Buterin argues that ETH should be valued as a store of value, not mainly on the basis of transaction fee burning. In his posts on X, covered by the sources on November 8 and 9, 2026, the Ethereum co-founder called for keeping the burn mechanism but gave priority to the network’s decentralization and resilience.
Why isn’t ETH burning enough to value it?
Fee burning, i.e. the permanent removal of ETH from circulation through the EIP-1559 mechanism, was never as strong an argument as it seemed, according to Buterin. As BeInCrypto reports, he doesn’t see cause for disappointment even in a prolonged situation where the burn stays below 10% of the level needed to offset the issuance of new ETH.
To explain his position, he used a model in which a token’s market cap is derived from the fees burned, divided by a discount rate. The latter expresses how future cash flows are converted into present value.
By this logic, he argued, justifying a market cap of about $270 billion from burns alone would require an Ethereum that operates more like a global company such as L’Oréal. His scenario includes about 700,000 ETH a year to fund protocol research and development, with the income of validators, the nodes that take part in confirming transactions, cut by two-thirds.
What problem does chasing higher fees create?
Pursuing a bigger burn can clash with users’ access to Ethereum. Buterin warns that this direction implies higher transaction execution costs (gas fees) and much more interventionist governance.
Think of a network that wants to offer privacy and security but becomes more expensive precisely for those who need these services. In his view, high fees can shut these users out. We think this is the heart of his argument: a bigger burn doesn’t automatically mean a more useful network.
Where does Buterin ground Ethereum’s value?
Buterin places decentralization and stability above burning as the basis for ETH’s long-term value. He uses the term CROPS for censorship resistance and resistance to capture, open source, privacy and security.
For a store of value, he stresses, the key criterion is survival. He links this goal to designing protection against quantum threats and to partially ossifying the protocol, i.e. limiting future changes to it. He adds that more assets issued on Ethereum’s mainnet would strengthen ETH’s utility.
What does this debate mean for ETH holders?
His intervention shifts the weight of the debate, without in itself changing Ethereum’s rules. The Block reports that a proposal to burn a growing share of validator rewards as the amount of staked ETH increases was withdrawn last month after pushback.
For readers in Greece, as for any ETH holder, the question is what to track beyond the amount being burned. The Cryptonomy team considers an assessment that includes utility, security and resilience to change more meaningful. This is our own approach, not a price prediction: the ambition for ETH to function as a store of value remains a goal, not a guarantee.