Vitalik Buterin Says Ethereum’s Value Should Hinge on Store-of-Value Role, Not Fee Burns

Ethereum co-founder Vitalik Buterin said the blockchain’s value should be rooted more in its role as a store of value than in the burning of transaction fees.

The Block reported on November 8 that Buterin wrote on X that it makes far more sense to view Ethereum as a store of value than as a fee-burning token. He said the EIP-1559 mechanism, which burns part of transaction fees, should remain in place, but there is no need for concern even if burned amounts fall well short of offsetting new issuance.

Buterin identified decentralization, censorship resistance, privacy and security as Ethereum’s core sources of value. In an environment where artificial intelligence is advancing rapidly, network stability will become even more important, he added. The priority, he wrote, is to build financial infrastructure that can be trusted over the long term rather than simply reduce token supply.

He also cast doubt on the “ultrasound money” thesis that gained traction during the 2021 bull market. At the time, investors broadly expected fee burns to reduce Ethereum’s supply and help support a floor under prices. But Buterin argued that most historical burns came from activity within the crypto market itself, including nonfungible token trading, making them bound to decline in market downturns.

Ethereum’s burn volume has in fact fallen sharply. According to data compiled by The Block, about 1.48 million ETH was burned in 2022, compared with about 19,200 ETH so far this year. Buterin said that while the expansion of the real-world asset, or RWA, tokenization market has strengthened Ethereum’s base in external economic activity, stable financial transactions are unlikely to trigger the kind of abrupt fee surges seen during the NFT boom.

He also raised concerns that policies aimed at maximizing fee burns could undermine network accessibility. Increasing burn volumes would require persistently high gas fees, which would lift transaction costs for users and run counter to Ethereum’s goals of decentralization and censorship resistance.

Buterin said the most important condition supporting Ethereum’s store-of-value role is the network’s long-term survivability. He cited stronger defenses against quantum-computing attacks, privacy technologies and the development of lightweight nodes as key priorities. He added that as Ethereum-based real-world asset tokenization expands, opportunities to use ETH as collateral are also likely to increase.

The comments drew a positive response from the industry. Solana co-founder Anatoly Yakovenko agreed with Buterin’s view that fees should not be treated as the core product. Simon Dedic, founder of Moonrock Capital, also said Ethereum’s role as a store of value could offer a compelling investment thesis for institutional investors.