Vitalik Buterin argues ETH should be positioned as a store of value rather than a fee-burning token
On November 8, Ethereum co-founder Vitalik Buterin posted on X explaining why he is more optimistic about positioning ETH as a store of value rather than as a fee-burning token. He pointed out that EIP-1559 and its burn mechanism should still be retained, but even if fee burning remains below one-tenth of breakeven in the long term, there is no need to be discouraged, because ETH’s value comes from elsewhere.
Vitalik said that what people value most about Ethereum is decentralization and CROPS, namely censorship resistance and capture resistance, open source, privacy, and security, and its most practical benefit is stability. In the era of AI shock, stability will be highly valued, and for asset holders, a store of value can turn these attributes into practical advantages rather than redundant ideological embellishments. He gave three reasons: first, the idea that fee burning supports valuation has never been as strong as it seemed; from 2021 to 2023, high burn amounts mostly came from crypto-internal scenarios, and if the ETH price fell sharply, the corresponding ability to pay would also decline; second, if Ethereum optimizes burn to support a market capitalization of about $270 billion, it would look more like a world-class company, requiring protocol-level R&D funding on the order of about 700,000 ETH per year and long-term reliance on strongly interventionist governance, which is difficult to reconcile with decentralization and capture resistance; third, optimizing for a store of value is aligned with decentralization and CROPS, and holders first want the asset to survive, so it requires conservative security trade-offs, moderate rigidity in the core protocol, reduced protocol politics, and easier safe and private holding and transfer.
He concluded that the best social reason to care about Ethereum is to let decentralization and CROPS benefit more people and more scenarios; the best personal reason to hold ETH is its store-of-value attribute, which is precisely the direct result of those characteristics. The more native assets there are on L1, and the easier it is for ETH to be credibly swapped with and used as collateral for other assets, the stronger the utility of holding ETH becomes.
Original source:
Title: Vitalik Buterin X platform thread Publisher: vitalik.eth (@VitalikButerin) Publication date: November 8, 2026 URL: https://x.com/VitalikButerin/status/2119401255919604064 Source type: post by the person involved Verification status: full thread text read Supporting content: argued that ETH as a store of value is superior to a fee-burning token; EIP-1559 should be retained; there is no need to be discouraged even if fee burning remains below one-tenth of breakeven; value comes from the stability brought by decentralization and CROPS; three specific reasons and the conclusion.
ABAB AI Insight
Vitalik shifts ETH’s valuation narrative from “fee burning creates scarcity” to “network properties support a store of value.” He explicitly keeps the EIP-1559 technical mechanism, but rejects using it as the main valuation floor. This separates the high burn rates seen in past cycles, which relied on internal crypto activity such as NFT trading, from external demand, and points out that the former would contract alongside price declines and cannot form a true floor.
Optimizing fee burning and the goal of decentralization are structurally in tension. In order to sustain a market capitalization of about $270 billion by pursuing high burn, Ethereum would require large protocol-level funding for research and development and stronger governance intervention, which conflicts with the direction of capture resistance and reducing protocol politics. At the same time, raising gas to increase burn could crowd out users with greater needs for privacy and security, creating incentives that run counter to the network’s core attributes.
The store-of-value positioning, by contrast, points in the same direction as CROPS. Holders’ primary concern is whether the asset can survive in the long run, which corresponds to conservative security trade-offs, moderate rigidity in the core protocol, reduced infrastructure dependence, and safe and private holding and transfer capabilities. The more native assets, including RWAs, there are on L1, the stronger ETH’s utility as a credible swapping and collateral tool becomes, making network stability directly translate into practical advantages for holders.
Against the backdrop of AI disruption, Vitalik views stability as an attribute that will be highly valued. Fee income fluctuates with application cycles, while a store of value based on decentralization and censorship resistance depends more on the network’s long-term credible operation than on short-term fee maximization. This makes ETH’s private holding rationale consistent with its social public attributes rather than substituting for them.
ABAB News · Cognitive Law
The fee-burning mechanism can be retained, but it does not constitute the main valuation floor because its revenue source often contracts in step with asset prices.
Optimizing burn to support market capitalization would require corporate-style governance and large protocol funding, which conflicts with decentralization and capture resistance.
A store-of-value positioning aligns with network stability and CROPS, turning holders’ primary need from “surviving” into practical utility.