Buterin argues ether's worth lies in stability rather than fee burn

what happened

Ethereum co-founder Vitalik Buterin argues that ether should be treated mainly as a store of value, according to The Block. He says the case for valuing it as a token that burns fees looked stronger in the last cycle than it actually was. In a Sunday morning thread on X, he said the store-of-value framing deserves more attention than the fee-burn framing. He still considers the EIP-1559 mechanism, introduced in 2021, a good thing and wants it kept, even if burning only partly offsets new issuance.

Buterin also walked through a valuation model in which a token's market cap equals its annual burn divided by a discount rate. Burning $1 billion a year at a 4% rate would imply a $25 billion floor, but he says that floor was never solid, because most of the ETH burned came from activity inside the network whose revenue would have fallen alongside the price. He cited a Yuga Labs digital land sale, where users paid up to $10,000 in fees.

Buterin believes tokenized real-world assets give the network a stronger external base, though that activity is unlikely to produce the same fee spikes. According to The Block's data, daily ETH burn has dropped sharply, from about 1.48 million ETH in 2022 to about 19,200 ETH so far this year.

why it matters

The comment is a reminder that the 'ultrasound money' thesis relied on high fees, which are now far lower. Emphasis on stability and security makes ether look more like a long-term asset, but the post itself does not change the network's fundamentals. ETH traded at $2,236 according to The Block.

market impact

Ether: weaker fee-burn thesis shifts the focus to network stability and store-of-value demand

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instruments