Vitalik Buterin says ETH should be a store of value, not a fee-burning token
In brief
- Vitalik Buterin argued on X on November 8 that ETH should focus on being a store of value.
- Buterin endorsed keeping Ethereum's EIP-1559 fee-burn mechanism in place.
- ETH holders shouldn't panic if long-term burns stay below 10% of break-even, Buterin said.
- Fee burns covered only about 2.07% of new ETH issuance, according to Crypto Briefing.
- Funding ETH's market cap in-protocol would take around 700,000 ETH a year, Buterin estimated.
What the burn does (and doesn't) prove
EIP-1559, introduced in 2021, destroys a portion of the fees users pay to transact on Ethereum, permanently removing that ETH from circulation. Buterin isn't proposing to scrap it. He suggested a burn below 10% of break-even is sustainable within Ethereum's broader economic picture.
His real point is about where the big burns came from. Buterin said the heavy fee burns of 2021 to 2023 came largely from activity inside the crypto ecosystem itself, and Crypto Briefing reported that those historical burns therefore shouldn't be read as a true valuation floor for ETH.
The current figures aren't close to offsetting issuance. Fee burns have accounted for only about 2.07% of new ETH issuance, according to Crypto Briefing, which means total ETH supply has been growing on net.
The 700,000 ETH problem
Buterin estimated that supporting ETH's market cap (roughly $270 billion, per Crypto Briefing) through an in-protocol funding model would require around 700,000 ETH annually. He didn't present that as a goal.
He warned that chasing fee burns aggressively in this way could push Ethereum toward centralization, arguing that a protocol-level funding scheme of that scale would threaten the project's principles of decentralization and governance.
Store of value over fee capture
Buterin tied the store-of-value case to Ethereum's decentralization, arguing it offers a kind of pragmatic stability that holders value.
He also pointed to the coming era of AI-driven disruption as part of his case.
The post follows his 2025 comments, when he discussed backing ETH's value through scaling solutions and incentives tied to Layer 2 networks. Crypto Briefing noted that as more activity moves to Layer 2s, fewer fees land on the main chain, and the burn naturally gets smaller. That's the backdrop for Buterin's argument that a shrinking burn, on its own, isn't a reason for ETH holders to panic.
Frequently asked questions
Is Vitalik Buterin proposing to remove the EIP-1559 fee burn?
No. Buterin endorsed keeping the EIP-1559 mechanism in place. EIP-1559, introduced in 2021, destroys a portion of Ethereum transaction fees and permanently removes that ETH from circulation. His argument is that holders shouldn't panic if long-term burns stay below 10% of the break-even level.
Why does Buterin say past fee burns aren't a valuation floor for ETH?
Buterin said the heavy fee burns of 2021 to 2023 came largely from activity inside the crypto ecosystem itself. Crypto Briefing reported that those historical burns therefore shouldn't be read as a true valuation floor for ETH.
Why does Buterin warn against chasing bigger fee burns?
Buterin estimated that supporting ETH's market cap of roughly $270 billion through an in-protocol funding model would require around 700,000 ETH a year. He warned that chasing burns aggressively could push Ethereum toward centralization and threaten its decentralization and governance principles.
