Source published: November 8, 2026, at 23:51:15 UTC+8. This article reflects the reporting and upgrade status at that time.
Ethereum co-founder Vitalik Buterin argued that ETH’s value should rest primarily on its role as a store of value, rather than on the amount of transaction fees the network burns. His comments came about five weeks after the authors of EIP-8363 withdrew their proposed validator-reward burn from consideration for the forthcoming Hegota upgrade.
The distinction is important: Buterin advocated retaining Ethereum’s existing fee-burning mechanism, not maximizing the burn or removing it.
Timeline and proposal status
- 2021 — EIP-1559 introduced: The upgrade established the mechanism that burns part of every transaction fee. Buterin said it remains “fine and good” and should stay in place.
- September 2026 — Roadmap discussion: Buterin outlined Ethereum’s roadmap through 2030 and said Hegota was likely to be its last “normal” fork.
- About five weeks before the November 8 report — EIP-8363 withdrawn from Hegota consideration: Its authors pulled the proposal following opposition. It would have burned a rising share of validator rewards as more ETH was staked.
- November 8, 2026 — Store-of-value argument: In a Sunday-morning X thread, Buterin said Ethereum should focus more on ETH as a store of value than as a fee-burning token.
- Further issuance discussion — Planned: EIP-8363’s authors planned a separate issuance process running through EthCC in April. The report did not specify a year for that April milestone.
At publication, Hegota remained forthcoming and was expected to follow the behind-schedule Glamsterdam hard fork. Withdrawal from Hegota consideration was not an implemented change to validator rewards.
Why Buterin questioned a burn-based valuation floor
Buterin described a valuation model in which a token’s market capitalization equals its annual burn divided by a discount rate. Under that model, burning $1 billion annually at a 4% discount rate would imply a $25 billion valuation floor.
But he argued that this was never a dependable floor for ETH: much of the burn in 2021–2023 came from crypto-internal activity whose revenue could fall alongside ETH’s price.
He cited a sale that burned $180 million in fees in one day. The Block clarified that the event was Yuga Labs’ Otherdeed digital-land sale for the Otherside metaverse—not a sale of monkey collectibles, as his description suggested. Some users paid up to $10,000 in transaction fees for Otherdeed NFTs, which the report said were selling for around $150 at publication.
According to The Block’s data, Ethereum burned approximately 1.48 million ETH, worth roughly $3.6 billion, in 2022, compared with about 19,200 ETH, or $43 million, in 2026 through the report’s publication.
Buterin said tokenized real-world assets give Ethereum a stronger claim to externally backed activity. However, he argued that a mature, stable business is unlikely to generate comparable fee spikes.
Higher burn would bring costs and governance trade-offs
Buterin said holders “should not feel sad” if fee burn remains below 10% of the level needed to offset issuance indefinitely, because ETH’s value comes from elsewhere.
He argued that supporting a market capitalization of roughly $270 billion through burn alone would make Ethereum comparable to a large company such as L’Oréal. Citing an AI estimate that L’Oréal spends about 0.58% of its market capitalization annually on research and development, he said matching that rate would overwhelm the Ethereum Foundation’s resources. Funding it through the protocol instead would require about 700,000 ETH a year and cut validator revenue by two-thirds, according to his comparison.
He also argued that maximizing burn would require long-term interventionist governance and, to some extent, higher gas prices. In his view, those pressures conflict with decentralization and capture resistance and could exclude users who particularly need privacy and security.
Survival and utility, rather than a burn target
Buterin identified survival as the first priority for ETH held as a store of value. He connected that goal to censorship and capture resistance, open source, privacy and security—principles he groups under “CROPS.”
He pointed to post-quantum security, partial ossification of the base layer, multisig wallets, the Kohaku privacy project, the FOCIL censorship-resistance proposal and lightweight nodes. He also argued that assets issued natively on Ethereum, including real-world assets, complement the store-of-value case by expanding uses for ETH, such as collateral.
EIP-8363 had cited the risk that a high staking ratio could pose to “ETH’s role as money.” Its opponents included SharpLink CEO Joseph Chalom and Aave founder Stani Kulechov. At the reporting date, the proposal’s withdrawal and the planned separate issuance process—not an enacted reward-burn mechanism—were the documented milestones.