Vitalik Buterin says ETH should be seen as a store of value, not fee burner
Vitalik Buterin argued ETH's value should not rest on fee burning, according to Wu Blockchain, The Block and U.Today, as Glamsterdam faces a reported bug.
Ethereum co-founder Vitalik Buterin said the network should put more weight on ETH as a store of value and less on its role as a "fee-burning token," according to Wu Blockchain, The Block and U.Today. Wu Blockchain reported that he considers fee burn never to have been as strong a valuation floor as it looked.
He also argued that trying to maximize fees could conflict with decentralization and with the network's resistance to capture, per Wu Blockchain.
What Buterin argued
Buterin named decentralization and what he calls CROPS as Ethereum's strongest traits. CROPS stands for censorship and capture resistance, open source, privacy and security. Wu Blockchain said he sees these qualities as a better fit for ETH's store-of-value role.
On burn levels, Wu Blockchain reported that Buterin said Ethereum should not worry if fee burn stays below 10% of breakeven over the long term, because ETH's value can come from elsewhere. U.Today phrased the same threshold as the "10% mark" for gas burned, so the exact wording of his comment differs between outlets.
U.Today also said Buterin described the historical peaks in burning under EIP-1559 as tied to cycles of crypto speculation, which fell in each bear market. It reported that he warned that squeezing a premium out of the protocol would push Ethereum toward aggressive management and a more commercial, centralized model. U.Today added that EIP-1559 itself is not being removed.
Context: a withdrawn proposal and Glamsterdam
The Block noted that a recent controversial proposal was withdrawn last month after pushback. That proposal would have burned a rising share of validator rewards as more ETH is staked. The Block's summary did not say whether Buterin's comments relate to that withdrawal.
U.Today, the only outlet among these sources to report it, said the Glamsterdam hard fork was halted after a testnet launch exposed a bug in the fee recalculation mechanism. It also reported that developers are preparing to expand layer-1 capacity through EIP-8037 and EIP-7928, aiming to raise gas limits to 200 million units. U.Today's reading is that more blockspace would make transactions cheaper and gradually cut burn rates. The other sources did not mention the halt or those proposals, and the claim has not been confirmed elsewhere here.
U.Today put ETH at $2,240 when Buterin made his comments and described the base layer as worth $270 billion. Those figures come from U.Today, not from FudPanic market data.
Reaction and what is unresolved
U.Today reported that Solana co-founder Anatoly Yakovenko agreed with Buterin, saying you cannot focus on fees as products and calling the idea "absolutely meaningless." The excerpt of that article was cut off, so his full remarks are not available.
Several points remain open in the sources. They give no timeline for fixing the reported Glamsterdam bug or restarting the fork. They do not say whether the withdrawn validator-reward burn proposal will return in a new form. They also do not say whether EIP-8037 and EIP-7928, the capacity proposals U.Today named, will go ahead as planned.
Sources
- Vitalik: ETH Should Focus on Store of Value, Not Fee Burning Wu Blockchain
- Vitalik Buterin says ETH should be valued as a store of value, not a fee-burning token The Block
- Vitalik Buterin Declares Ethereum (ETH) a Store of Value, Not Fee-Burning Token U.Today
Written with AI assistance from the sources above and checked against them. Not investment advice.