Buterin argues that ETH’s monetary value should depend on Ethereum’s decentralization, security and resistance to censorship rather than maximizing transaction fees. Recent supply figures sho
Ethereum co-founder Vitalik Buterin is challenging the idea that ETH needs substantial transaction-fee burning to justify its valuation, arguing that the network’s ability to preserve value matters more than the amount of cryptocurrency it destroys.
In a November 8 post on X, Buterin said Ethereum should prioritize ETH as a store of value rather than optimize its economics around fee destruction. He argued that maximizing fees could undermine decentralization and resistance to outside control.
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 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)
EIP-1559 (including its burn) is fine and good, we should keep them. But we should not feel sad if fee burn is < 10% of breakeven indefinitely; the value of ETH comes from elsewhere.
The core idea: the big thing that people appreciate about Ethereum is decentralization and CROPS. The main pragmatic benefit that these things translate into is stability. SoV is the category where that is not an unneeded extra we merely put effort into for ideological reasons, but rather a pragmatic strength from the perspective of people putting in their assets. And in the era of AI disruption, stability will be highly valued.
— vitalik.eth (@VitalikButerin) November 8, 2026
The argument comes as Ethereum’s monetary data shows a substantial gap between new issuance and token burning, raising questions about the investment thesis that ETH would become increasingly scarce as network adoption expanded.
Ethereum introduced transaction-fee burning through EIP-1559 in August 2021. The mechanism destroys the base fee paid for execution-layer transactions, allowing higher network demand to offset some or all of the ETH issued to validators.
But the relationship between activity and scarcity has weakened as Ethereum has expanded its scaling infrastructure.
A November 8 snapshot, based on data from ethsupply.fyi and compiled by InsideCrypto, illustrates the difference between Ethereum’s monetary narrative and its recent supply dynamics.
Ethereum Supply: 30-Day Snapshot November 8, 2026 | 12:12 UTC Gross issuance89,614 ETH Total ETH burned2,890 ETH Net supply increase+86,723 ETH Burn relative to issuance3.23% Source: InsideCrypto / ethsupply.fyi. Historical snapshot; figures rounded. Total burn includes execution and other token destruction, not exclusively EIP-1559 execution fees.Buterin explicitly rejected the assumption that fee burning must offset issuance to support ETH’s value. He suggested Ethereum should remain comfortable with burns below 10% of the amount needed for monetary break-even, even over an extended period.
That position challenges the ultrasound money narrative, which emphasized ETH’s potential to become deflationary through sustained network usage.
Unlike Bitcoin, whose issuance follows a predetermined schedule toward a fixed maximum supply, Ethereum’s net supply depends on validator issuance and the amount of ETH destroyed through network fees.
Buterin is not proposing the removal of EIP-1559. His objection concerns making fee destruction the primary objective of Ethereum’s economic design.
Ethereum’s March 2024 Dencun upgrade introduced EIP-4844, giving rollups access to blob-based data availability through a separate fee market.
The upgrade lowered the cost of publishing rollup data without requiring every layer-2 transaction to consume equivalent execution gas on Ethereum’s main chain.
This creates a structural tension: Ethereum can process more economic activity across its ecosystem while collecting less base-layer fee revenue per transaction.
To illustrate the sensitivity, assume Ethereum consumes an average of 15 million execution gas per 12-second slot, with no missed slots. That produces approximately 39.42 trillion gas units annually.
Ethereum Fee Burn Sensitivity Illustrative annual ETH destruction at different gas prices Base Fee Annual ETH Burn 1 gwei 39,420 ETH 5 gwei 197,100 ETH 10 gwei 394,200 ETH 25 gwei 985,500 ETH 50 gwei 1,971,000 ETH Modeled Break-Even Base Fee ~27.6 gwei Estimated execution base fee required to offset annualized issuance under the model assumptions. Methodology: Assumes 15 million execution gas per 12-second slot, constant base fees and 365 days. Excludes blob-fee burning and other token destruction. Figures are illustrative scenarios, not historical observations or forecasts.Illustrative model using constant gas consumption and base fees over 365 days. Excludes blob-fee burning and other token destruction. These figures are scenarios, not observed network activity or forecasts.
Annualizing the recent issuance snapshot produces approximately 1.09 million ETH in new supply. Under the model’s assumptions, execution-layer base fees would need to average roughly 27.6 gwei to offset that issuance without additional burns.
The calculation is conditional rather than a forecast. Ethereum’s actual gas consumption, blob fees and validator issuance change over time.
More importantly, higher fees do not guarantee proportionally higher burns. Expensive blockspace can discourage transactions or push activity toward alternative networks.
That is the trade-off behind Buterin’s argument. Designing Ethereum to maximize fee destruction could undermine the affordability that scaling upgrades are intended to deliver.
Buterin’s alternative emphasizes Ethereum’s distinctive security properties, which he groups under CROPS: censorship and capture resistance, open source, privacy and security.
These characteristics matter for financial infrastructure because they determine whether users can transact, retain custody and enforce ownership without depending on a single intermediary.
Ethereum’s technical roadmap already contains initiatives that address parts of this framework.
One example is EIP-7805, which proposes Fork-Choice Enforced Inclusion Lists, commonly known as FOCIL.
The mechanism is designed to strengthen transaction inclusion guarantees by limiting the ability of individual block proposers to exclude valid transactions indefinitely.
FOCIL is not a comprehensive solution to maximum extractable value (MEV), nor does its proposal establish that the mechanism has been deployed. Its relevance lies in the effort to make Ethereum less dependent on the discretion of individual transaction producers.
Privacy development offers another example.
The Kohaku initiative explores privacy-focused wallet infrastructure, including tools intended to make privacy-preserving transactions more accessible.
These projects illustrate the broader technical direction behind Buterin’s argument, rather than measures he necessarily announced in his November 8 statement.
Both priorities can create economic value without requiring users to pay higher transaction fees.
A network that resists censorship and supports secure custody may attract long-term capital because its infrastructure is dependable, not because every transaction destroys a substantial amount of ETH.
Buterin’s argument requires investors to distinguish network adoption from token value accrual.
Fee burning provides a measurable supply effect, but it does not operate like corporate earnings distributed to shareholders. Destroying ETH reduces supply; it does not give holders a contractual claim on Ethereum’s transaction revenue.
A store-of-value thesis depends on different evidence: persistent demand to hold ETH, confidence in network security, the ability to resist centralized interference and the usefulness of Ethereum as settlement infrastructure.
Staking introduces another source of economic return, although validator rewards are not automatically distributed to all ETH holders and carry operational risks.
The distinction becomes particularly important as Ethereum expands stablecoin settlement, tokenized assets and layer-2 activity. Greater transaction volumes may strengthen the network’s utility without producing the fee burns implied by older valuation models.
Investors relying on projected deflation must therefore assess whether those forecasts remain consistent with Ethereum’s scaling strategy.
Buterin’s position is that Ethereum should not make transactions more expensive simply to support a scarcity narrative.
If that approach prevails, ETH’s long-term investment case will depend increasingly on whether the market values Ethereum’s security and independence enough to hold its native asset, even when supply continues to grow.
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