Ethereum co-founder Vitalik Buterin is arguing that ETH’s long-term value case should rest more on its role as a store of value than on transaction fees being permanently removed from circulation. In a November 8 post on X, Buterin said Ethereum should keep EIP-1559 and its burn mechanism, but should not treat high fee destruction as necessary for ETH’s value. He added that the network should be comfortable even if fee burn remains below 10% of monetary breakeven indefinitely.
Current supply data reinforces why the distinction has become relevant. Ethereum’s supply tracker shows roughly 888,670 ETH issued during 2026 through November 9 against about 21,122 ETH burned, meaning burn has offset approximately 2.37% of gross issuance. Ethereum remains net inflationary during the measured 2026 period, but Buterin’s argument is that achieving deflation should not become the protocol’s overriding economic objective.
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
Buterin Reframes ETH Around CROPS
Buterin’s alternative centers on decentralization and what he calls CROPS: censorship and capture resistance, open source development, privacy and security. He argues that those properties translate into stability, giving ETH a stronger store-of-value rationale than a valuation model dependent on continually generating high transaction fees. The position does not abandon EIP-1559, whose design burns Ethereum’s base transaction fee while improving fee predictability.
His criticism focuses instead on the assumption that burn provides a durable valuation floor. Buterin noted that unusually high Ethereum fees during 2021 through 2023 were heavily connected to crypto-native speculation, including NFT activity. Revenue generated by activity whose purchasing power depends partly on crypto valuations cannot necessarily provide an external floor beneath ETH itself, he argued. Tokenized real-world assets offer a stronger source of external economic activity, but mature financial applications are unlikely to recreate speculative fee spikes consistently.
Layer 2 scaling has further changed Ethereum’s fee environment. The Dencun upgrade introduced blobs through EIP-4844 specifically to reduce rollup data costs, allowing L2 networks to process transactions more cheaply without competing for ordinary Ethereum calldata in the same way. Cheaper scaling improves usability while weakening any assumption that Ethereum should deliberately maximize L1 fees to maximize ETH burn. That tension is increasingly relevant as Ethereum pushes toward a roadmap in which Hegotá prioritizes censorship resistance and flexible transaction architecture.
Higher Burn Could Create Governance Trade-Offs
Buterin also questioned what Ethereum would have to become if fee generation were treated as the primary mechanism supporting ETH’s valuation. Using an approximately $270 billion market capitalization and a corporate R&D comparison, he estimated that such a model could imply around 700,000 ETH per year of protocol-funded development. The figure was an illustrative corporate analogy, not a proposed Ethereum budget, and Buterin used it to highlight the governance consequences of pursuing revenue like a conventional company.
He argued that maximizing fee revenue could require more interventionist governance and create incentives to tolerate higher gas prices, potentially conflicting with accessibility and decentralization. Ethereum’s development direction instead includes mechanisms such as FOCIL, or EIP-7805, which is designed to reduce the ability of block builders to censor transactions. FOCIL illustrates the kind of protocol property Buterin places inside the CROPS thesis rather than a mechanism designed to extract additional fees.
That framing connects with other security-focused work around Ethereum, including transaction simulation designed to reduce blind signing and a longer-term roadmap covering privacy and post-quantum security. Buterin’s argument is therefore less a tokenomics proposal than a statement about what Ethereum should optimize for: resilience, credible neutrality and security rather than maximizing the amount of ETH destroyed through transaction demand.
