Vitalik Buterin Says ETH Should Be a Store of Value, Not a Fee-Burning Token

Ethereum co-founder Vitalik Buterin has argued that ETH’s long-term value rests on its role as a store of value (SoV), an asset people hold to preserve wealth over time, rather than on its identity as a token whose supply shrinks when transaction fees are burned. He said Ethereum should keep its fee-burn mechanism, but that the network’s decentralization, not its fee revenue, is what gives ETH its value.

In a post on X on Sunday, November 8, 2026, Buterin said that focusing on “ETH as store of value (SoV)” makes “much more sense” than focusing on “ETH as fee-burning token.” He listed three 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 ETH function in ways that are very hard to make compatible with decentralization and capture resistance.”
3. “Meanwhile, optimizing for ETH as SoV is aligned with Ethereum focusing on its unique strengths (decentralization and CROPS).”

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

EIP-1559 Stays, but the Burn Is Not the Point

The burn Buterin is talking about comes from Ethereum Improvement Proposal (EIP) 1559. It changed how Ethereum transaction fees work. Each transaction now pays a “base fee,” which the protocol destroys permanently, and an optional tip that goes to the network’s validators. The change went live with the London hard fork on August 5, 2021.

The burn later became central to the “ultrasound money” narrative. That idea held that if ETH burned more than the network issued, its supply would shrink, making it scarcer than Bitcoin, which is often called “sound money.”

Buterin did not call for removing the mechanism. “EIP-1559 (including its burn) is fine and good, we should keep them,” he wrote. “But we should not feel sad if fee burn is < 10% of breakeven indefinitely; the value of ETH comes from elsewhere.”

Breakeven is usually understood as the point where the ETH burned equals the new ETH issued as validator rewards, so total supply stays flat. Buterin’s comment means he is comfortable with burns staying at a small fraction of that level for good.

Why Buterin Says the Fee-Burn Case Was Weaker Than It Looked

Buterin pushed back on the idea that burned fees put a dependable floor under ETH’s price. He said the large burns of 2021 to 2023 came mostly from activity inside the crypto ecosystem, such as speculative trading and non-fungible token (NFT) sales, rather than from outside demand for the network.

Because that activity tends to rise and fall with ETH’s own price, the fee revenue behind it shrinks when the price drops. In other words, the supposed floor weakens at exactly the moment holders would rely on it most.

The 700,000 ETH Problem

Buterin’s second argument was about what a fee-driven Ethereum would have to look like. To justify a market capitalization of about $270 billion through fee revenue, he said, Ethereum would need to behave like a corporation of similar size. His example was the French cosmetics group L’Oréal, which he placed at around the 55th largest company in the world by market value.

He estimated that L’Oréal’s yearly research and development (R&D) spending is about 0.58% of its market capitalization. If Ethereum funded itself at the same rate, it would need about 700,000 ETH a year in protocol-level funding. Buterin said that would cut validator income by roughly two-thirds. The figures are consistent: 0.58% of $270 billion is about $1.57 billion, which at current prices comes to roughly 700,000 ETH.

He added that a company of that size depends on constant investment and active management to stay competitive. For Ethereum, that would mean heavily interventionist governance, which he said would be hard to square with decentralization and censorship resistance. He also noted that maximizing fee revenue could mean pushing gas prices (the fees users pay for transactions) higher, which would shut out some users.

Store of Value and CROPS

The third argument was the positive case. “The core idea: the big thing that people appreciate about Ethereum is decentralization and CROPS,” Buterin wrote. “The main pragmatic benefit that these things translate into is stability.”

CROPS stands for censorship resistance, open source, privacy, and security. The Ethereum Foundation (EF), the non-profit that supports the network’s development, set these out as core principles in the EF Mandate published on March 13, 2026. In his post, Buterin also stressed capture resistance, meaning that no single company, government, or interest group should be able to take control of the network.

He argued that for a store of value, these properties are not ideological extras but a practical strength for anyone putting their assets into it. “And in the era of AI disruption, stability will be highly valued,” he wrote.

Buterin also pointed to several priorities that he said fit an SoV focus:

• cautious security choices, including preparing for post-quantum cryptography
• partial ossification, meaning the core protocol changes less often over time
• a high bar for adding new precompiles, the built-in functions coded directly into the protocol, and for new in-protocol rewards
• better tools for holding ETH safely and privately, such as multisignature (multisig) wallets and privacy-preserving account abstraction
• transaction inclusion guarantees such as Fork-Choice Enforced Inclusion Lists (FOCIL), which would let a committee of validators require that valid transactions make it into blocks

He also said that more real-world and decentralized assets issued directly on Ethereum’s base layer, known as Layer 1 (L1), could make holding ETH more useful without the centralizing pressure that comes from maximizing fees.

Separate Post Backs Slower AI Compute Scaling

Earlier the same day, in a separate post, Buterin said he did not share the “strong emotional reaction” against movements opposing new data centers. His reasoning was that algorithmic progress means whatever larger data centers could do in two years, today’s data centers will be able to do in about four years, “probably sooner.”

He argued that a slowdown in compute “hyper-scaling” would give more time to protect the world against cybersecurity and biological risks. He also said that slowing AI by one year would slow scientific applications by much less than a year, because science is limited by many factors besides AI. He added that he reached this view “without any controversial ‘doomer arguments’.”

What It Means for ETH Holders

Buterin’s comments are an opinion, not a protocol proposal. They do not change Ethereum’s code, and EIP-1559 stays active. Still, they move away from the fee-burn message that dominated Ethereum discussions after 2021, and they match the CROPS priorities the EF has stressed throughout 2026.

The post follows Buterin’s recent appearances at Devcon 8 in Mumbai, where he focused on security, privacy, and technology that users can verify for themselves.

At the time of writing, ETH traded at about $2,237, with a market capitalization of around $273.4 billion, according to CoinGecko.

The open question is whether investors, who have long followed ETH’s burn rate and supply figures, will accept decentralization and stability as a basis for valuation in their place. Buterin argues that the network’s long-term credibility matters more than short-term fee revenue.

Also Read: Coinbase CEO Restructures Workflow Around AI Agents and Human Reviews