- Vitalik Buterin posted a thread arguing that ETH makes more sense valued as a store of value than on the fees the network destroys.
- The amount of ETH burned has collapsed, from about 1.48 million ETH (roughly $3.6bn) in 2022 to about 19,200 ETH (roughly $43m) so far in 2026, according to The Block’s data.
- It is a personal opinion thread. No code, supply schedule or governance rule changed because of it.
For three years the simplest argument for owning ETH was that using Ethereum destroys it. Every transaction burns a slice of the supply, so more activity means fewer coins. On Sunday the person who co-founded the chain told holders to stop resting the valuation on that.
A lot of people bought into the idea that network use mechanically shrinks ETH’s supply and supports the price. The man who co-founded Ethereum has now said in public that it was never going to do that job, and the burn figures are a fraction of what they were four years ago. Nothing about how ETH works changed on Sunday. What changed is that the most-repeated reason to own it has lost its most credible supporter.
What the burn actually does
Since August 2021, under a change called EIP-1559, every Ethereum transaction pays a base fee that is destroyed rather than handed to the people running the network. At the same time, the network creates new ETH to pay , the computers that process transactions and secure the chain. When the burn exceeds that new issuance, the total supply of ETH falls.
That is where “ultrasound money” came from, the slogan that carried Ethereum through 2021 and 2022. A busy network would eat its own supply, and that shrinking supply would act as a floor under the price.
Buterin’s thread, as quoted by The Block, does not ask for any of that machinery to be torn out. He called EIP-1559 “is fine and good” and said it should stay. What he rejected is the valuation argument built on top of it: “we should not feel sad if fee burn is < 10% of breakeven indefinitely; the value of ETH comes from elsewhere.” Breakeven, in that sentence, is the point where the burn exactly cancels new issuance.
He went further on the history. Much of the ETH burned between 2021 and 2023 came from what he called “crypto-internal use cases”, pointing to a single day when roughly $180m of fees went up in smoke on what he described as a digital monkey sale. The Block identifies that as Yuga Labs’ Otherside land sale in 2022. Of the floor thesis, Buterin’s verdict was that “this was never a true floor”.
The arithmetic he put behind it
Buterin’s estimate, as relayed by The Block, is that justifying ETH’s roughly $270bn market value on fee burn alone would require spending on a scale comparable to a company like L’Oreal, something in the region of 700,000 ETH a year, which would cut validator revenue by about two thirds. He also argued that chasing fee revenue “may price out users, including some users who may need privacy and security the most”, and that steering the protocol towards maximum burn would need “highly interventionist governance, for the long term”, which he sees as incompatible with keeping Ethereum decentralised and hard to capture.
The collapse in the burn itself is not mysterious. The base fee is what gets destroyed, so when fees fall the burn falls with them. Most Ethereum activity has moved to layer twos, separate networks that bundle transactions together and settle them on Ethereum in batches at a fraction of the old cost. That reading is ours rather than a claim in the thread, but it is the mechanism behind the numbers.
The proposal that came first
This did not arrive out of nowhere. According to The Block’s earlier reporting, a proposal called EIP-8363, which would have burned a rising share of validator rewards as more ETH is staked, was pulled by its own co-authors from consideration for the Hegota upgrade about five weeks ago, after opposition from SharpLink chief executive Joseph Chalom and Aave founder Stani Kulechov.
Withdrawn from consideration is not the same as rejected. It never went through Ethereum’s core developer process, and the same reporting says the authors intend to run a separate issuance-focused process through EthCC in April. The argument about how much ETH the protocol should create and destroy is paused, not finished.
Three well-known figures welcomed the thread publicly. Solana co-founder Anatoly Yakovenko said Buterin “is absolutely right that you can’t focus on fees as the product”. Attorney Gabriel Shapiro called it “a ‘nature is healing’ moment”, and Moonrock Capital founder Simon Dedic called it “the biggest for Ethereum”. Three posts on X is three posts on X, not validators, institutions or the wider market changing how they price anything.
What to watch
Whether any of this reaches an All Core Devs call. A thread cannot change issuance; an accepted EIP can, and the EIP-8363 authors have signalled they will come back with one. If the issuance debate reopens in April, that is the moment the argument acquires teeth.
And watch the burn figures themselves over the next few quarters. If they keep falling while ETH holds its value, Buterin’s case gets easier to make. If the two move together, the thesis he just talked down will be harder to bury. Our other Ethereum protocol coverage tracks the upgrade schedule this would run through.
One caveat on sourcing: all of Buterin’s wording here is as quoted and relayed by The Block rather than checked line by line against the live thread, which we could not retrieve directly.