Ethereum co-founder Vitalik Buterin has urged the crypto community to reframe ether as a store of value rather than a fee-burning token, a shift he says better reflects the network's core strengths and could make ETH more attractive to institutional investors. In an X thread on Sunday morning, Buterin said ETH as store of value makes "much more sense to focus on" than ETH as fee-burning token, even though the network should keep EIP-1559 and its burn mechanism.
Buterin said the fee-burn valuation model, where market cap equals annual burn divided by a discount rate, was never a true price floor. He noted that much of the ETH burned from 2021 through 2023 came from crypto-internal activity, including a single Yuga Labs Otherdeed land sale that consumed roughly $180 million in fees. Daily burns have since collapsed, with about 1.48 million ETH, worth roughly $3.6 billion, burned in 2022, compared with around 19,200 ETH, or $43 million, so far in 2026 according to The Block data.
He argued that optimizing for fee burn would require interventionist governance and higher gas prices, which would undermine decentralization and price out users who need privacy and security the most. Instead, he pointed to Ethereum's decentralization, censorship resistance, open source, privacy, and security, collectively called CROPS, as the main value proposition. For store-of-value investors, the most important metric is survival, he wrote, highlighting work on post-quantum security, partial ossification of the base layer, multisig wallets, the Kohaku privacy project, the FOCIL censorship-resistance proposal, and lightweight nodes.
Buterin also compared ether's market capitalization of about $270 billion to large companies like L'Oreal, saying fee-burn alone would require heavy in-protocol funding of roughly 700,000 ETH per year and would cut validator revenue by two-thirds. He tied the store-of-value narrative to growth in tokenized real-world assets issued natively on Ethereum, which he said expands what holders can do with ETH, including using it as collateral.
His remarks follow Ethereum Foundation funding tensions. The foundation sold 20,000 ETH worth about $47 million to Bitmine over two weeks in April and May, drawing community criticism, and Buterin has said the EF should become a smaller ship that sells less ETH and focuses on work that would not otherwise happen.
The comments come about five weeks after the controversial EIP-8363 was withdrawn from the Hegota upgrade. That proposal would have burned a rising share of validator rewards as staking increased and faced opposition from SharpLink CEO Joseph Chalom and Aave founder Stani Kulechov. Its authors plan a separate issuance process through EthCC in April.
Industry figures responded positively. Solana co-founder Anatoly Yakovenko said Buterin is right that fees cannot be the product. Attorney Gabriel Shapiro called the thread a "nature is healing" moment, while Moonrock Capital founder Simon Dedic said ETH as a store of value would be the biggest bull case and the easiest story to sell to institutional capital. ETH traded around $2,236, down 0.3% on the day.
