Vitalik Buterin wants Ethereum to stop measuring ETH by how much of it gets burned. In a long thread on Sunday, the Ethereum co-founder argued that ETH should be treated first as a store of value, and that “we should not feel sad if fee burn is < 10% of breakeven indefinitely.” On current onchain data, the burn is already well below that line: over the past 30 days it offset only about 3% of new issuance.
What Buterin said
Buterin laid out three reasons for putting “ETH as store of value” ahead of “ETH as fee-burning token”. The first is that the burn case “never was as strong as it seemed.” The second is that optimizing for burn would push Ethereum toward a structure that is hard to square with decentralization and capture resistance. The third is that a store-of-value focus lines up with what he sees as Ethereum’s real strengths.
He was explicit that he is not proposing to remove anything. “EIP-1559 (including its burn) is fine and good, we should keep them,” he wrote. The change he is arguing for is one of emphasis: “the value of ETH comes from elsewhere.”
Why the burn was never a floor
The fee-burn thesis rests on a net-present-value argument. Buterin walked through it with a simple example: if $1 billion of a token is burned every year and the market applies a 4% discount rate, the burn implies a valuation “floor” of $25 billion.
His objection is about where that burn came from. Ethereum burned “millions of ETH per year” in 2021-23, he wrote, but “the bulk of that burn was crypto-internal use cases.” If ETH had fallen tenfold, the buyers paying those fees would have had far less to spend, so the revenue would have shrunk with the price. He cited the $180 million in fees burned in a single day during a “digital monkey” NFT sale as one example of that crypto-internal demand. “The floor argument only works if the backing of the revenue stream is external,” he wrote. He conceded that the growing tokenized real-world asset economy gives Ethereum a better claim to outside demand today, but said that kind of steady business is unlikely to produce bursts of that size.
The cost of chasing fees
To justify a market value of roughly $270 billion through burn alone, Buterin argued, Ethereum would have to behave like a major corporation on the scale of L’Oreal. Citing what he described as an AI estimate that L’Oreal spends about 0.58% of its market value a year on research and development, he said matching that would take in-protocol funding of around 700,000 ETH a year, cutting validator revenue by about two-thirds. It would also need “highly interventionist governance” to keep chasing new markets.
He added that maximizing burn means tolerating higher gas prices, which can price out users, “including some users who may need privacy and security the most.”
Instead, Buterin said ETH should be judged on store-of-value tests, the first being survival. He listed conservative, hash-based security choices, partial ossification of the base layer, easier and more private self-custody, and FOCIL, a proposal meant to stop block builders from excluding transactions. He also noted that he runs a node on his laptop and that it synced in under six hours.
What the burn data shows now
The numbers show how far below that line the burn already sits. Data from ultrasound.money showed about 2,716 ETH burned over the 30 days to Sunday, while total ETH supply rose by roughly 86,700 ETH to about 122.2 million. That puts gross issuance near 89,400 ETH for the period, meaning the burn cancelled about 3% of it. Over the last seven days the ratio was closer to 1.4%.
The same tracker shows ETH supply up about 1.68 million since the Merge in September 2022, even though roughly 4.64 million ETH has been burned since EIP-1559 went live in August 2021. The “ultrasound money” idea, that a busy network would make ETH steadily deflationary, depended on high base fees on mainnet. With much of the activity now on cheaper layer-2 networks, the burn has shrunk to a sliver of issuance, which runs at about 1.09 million ETH a year.
Buterin is not warning that the burn might slip below his 10% line. On ultrasound.money’s figures it already has, and he is arguing that nobody should try to fix that by turning the protocol into a fee-maximizing business. ETH traded near $2,235 on Sunday, according to CoinGecko.
What to watch
The thread is an opinion, not a protocol change, and Buterin has no formal veto over Ethereum’s roadmap. His posts do tend to frame the debates that follow among core developers. The places where his argument would show up in practice are proposals for in-protocol funding, fee-market changes and the scope of upcoming upgrades. The Ethereum Foundation recently laid out eight contract assumptions the Glamsterdam upgrade would break, a reminder that even near-term changes are being weighed against stability. For a rule-level reference on how the burn works, the original EIP-1559 specification remains the source.
FAQ
Is Vitalik Buterin proposing to end ETH fee burning? No. He wrote that EIP-1559 and its burn are “fine and good” and should stay. He is arguing that the burn should not be treated as the main source of ETH’s value.
How much ETH is being burned right now? About 2,716 ETH over the past 30 days, according to ultrasound.money, against roughly 89,400 ETH of new issuance. Net supply is still growing at a little under 0.9% a year on that pace.
What does “10% of breakeven” mean? Breakeven is the point where burned ETH equals newly issued ETH, so supply stops growing. Buterin said holders should be comfortable even if the burn stays below a tenth of that level indefinitely.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.
