What if Ethereum burned less than 10% of the ETH it creates? Would ETH still deserve to be considered a long-term store of value?
According to Vitalik Buterin, the answer could be yes.
In a series of posts published on X on November 8, Ethereum's co-founder presented a different way of thinking about ETH's value. Rather than focusing almost entirely on supply reduction and token burns, he wants people to look at something more fundamental: how reliably Ethereum allows users to store, protect, and transfer wealth.
And there's an interesting twist. Buterin still wants Ethereum to keep burning transaction fees. He simply doesn't believe the burn should be the main reason people value ETH.
The problem with the "ultrasound money" narrative
Since the introduction of EIP-1559, Ethereum has destroyed a portion of the transaction fees paid by users. When network activity is high enough, ETH burned can exceed newly issued ETH, making the asset deflationary.
This helped create the famous "ultrasound money" narrative.
Buterin isn't rejecting this mechanism. He's questioning how much long-term value it can actually justify.
Consider a simplified example: if Ethereum burns $1 billion worth of ETH every year, a 4% discount rate would give that recurring cash flow an estimated present value of around $25 billion.
That's meaningful, but it's far from enough to explain the roughly $270 billion ETH valuation discussed in Buterin's thread.
There's another problem: transaction fees are heavily influenced by crypto market activity.
During a speculative boom, traders rush into DeFi, NFT launches attract attention, and users compete for block space. All of this increases fees and, consequently, the amount of ETH burned.
But what happens when the market crashes?
Lower prices can mean less capital available for trading, borrowing, and speculation. Activity falls, fees decline, and the burn becomes weaker precisely when investors might want that supposed price support the most.
In other words, a mechanism that appears to protect ETH during a bull market may offer much less protection during difficult periods.
Why Ethereum shouldn't become a business chasing fees
One of the most interesting parts of Buterin's argument is his comparison between Ethereum and a large corporation such as L'Oréal.
If Ethereum had to justify its entire valuation through burned fees, it could theoretically need to operate like a massive company, constantly investing in research, development, and new products.
Buterin uses an illustrative estimate of approximately 700,000 ETH in annual research and development funding. In his scenario, that could absorb around two-thirds of validator revenue.
This raises an uncomfortable question: who should decide how that money is spent?
A protocol with enormous financial resources controlled through governance could become vulnerable to political pressure, lobbying, and concentrated influence.
There is also a conflict between maximizing fees and making Ethereum accessible.
Higher transaction fees might generate more ETH burns, but they could also push ordinary users out of the network.
Should Ethereum prioritize maximizing the amount of ETH destroyed, or should it make the network affordable enough for millions of people to use?
For Buterin, those two objectives shouldn't be confused.
ETH as a store of value: security matters more than scarcity alone
Here's where his argument gets particularly interesting.
A genuine store of value must first be able to survive.
That means remaining useful and trustworthy through technological changes, security threats, regulatory pressure, and even the potential challenges posed by quantum computing.
Buterin uses the acronym CROPS to describe important properties Ethereum should preserve:
Censorship resistance and protection against excessive control.
Open-source infrastructure that anyone can inspect.
Privacy for users and institutions.
Security that remains reliable over time.
These aren't just abstract technical ideals. They have direct consequences for anyone holding ETH.
Can you safely custody your assets without depending on a centralized company? Can you transfer funds without worrying that a powerful intermediary might block you? Can you verify the network independently?
Buterin points to several developments that could help Ethereum answer these questions.
Multisignature wallets improve custody security by requiring multiple approvals before funds can move. Projects such as Kohaku aim to bring stronger privacy tools into the wallet experience.
He also highlights proposals such as EIP-8288, which concerns signature and proof aggregation, and FOCIL (EIP-7805), designed to make transaction censorship more difficult.
Even independent verification matters. Buterin describes syncing an Ethereum node on his laptop in less than six hours, using approximately one-eighth of its storage capacity.
The broader goal is to make Ethereum dependable without forcing users to trust a handful of powerful operators.
Can real-world assets give ETH a stronger foundation?
Another important part of the thesis concerns adoption.
Ethereum doesn't necessarily need endless speculative NFT launches or extremely expensive transactions to become more valuable.
The growth of tokenized real-world assets, stablecoins, and decentralized financial applications could create more sustainable demand for Ethereum infrastructure.
As more assets are issued and exchanged on the network, ETH becomes increasingly useful as a trading asset, collateral, and a means of interacting with the ecosystem.
Buterin's vision is therefore broader than a simple supply-and-demand argument.
He wants Ethereum to become infrastructure people and institutions can rely on, regardless of whether the crypto market is experiencing euphoria or panic.
That also requires difficult technical compromises. Faster block production, for example, might improve the user experience but could favor operators with more powerful hardware, potentially increasing centralization risks.
Building a better Ethereum isn't simply about making everything faster. It's about improving performance without sacrificing the properties that make the network valuable in the first place.
My take: the real ETH investment thesis is changing
I find this perspective particularly interesting because it separates two things that investors often treat as the same: the strength of a blockchain and the price of its native token.
A secure, decentralized, censorship-resistant Ethereum would be a much more useful financial infrastructure. But that doesn't automatically guarantee that ETH will increase in price.
The market still has to recognize and reward that utility.
The burn remains relevant, and EIP-1559 is still an important part of Ethereum's economic design. But relying on deflation alone to justify ETH's long-term value has always been a limited investment thesis.
In my view, the bigger opportunity lies in what Ethereum could become: a global infrastructure for holding, transferring, and using digital assets without depending entirely on centralized intermediaries.
If Ethereum succeeds in making self-custody easier, privacy stronger, transactions more reliable, and independent verification more accessible, its value proposition could become much more resilient than a simple token-burning narrative.
Perhaps the most important question for ETH investors isn't how much ETH Ethereum will burn next year. It's whether people will still trust Ethereum to protect and move their wealth 10 or 20 years from now.
And that's a much bigger challenge than simply making ETH scarcer.
What do you think? Is ETH's burn mechanism still the strongest argument for its long-term value, or should Ethereum focus much more on utility, security, and becoming the backbone of the digital economy?
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