Ethereum’s founder has personally debunked the ultrasound money myth that the market has repeated for years.
According to reports by crypto.news and The Block, Vitalik Buterin recently published a lengthy post on the social platform X, revisiting Ethereum’s long-term valuation framework. He made it clear that ETH should be viewed as a store-of-value asset, not a cash-flow token dependent on fee burning.
Vitalik said bluntly that over the past few years, the market had touted EIP-1559’s burn mechanism as a pillar of valuation, but that logic was never as solid as it seemed. He looked back at the period from 2021 to 2023, when Ethereum burned millions of ETH, but noted that much of that activity was driven by speculation within the crypto market and NFT hype. Once market conditions cooled, fees generated by this internal cycle quickly dried up, offering no real price support at the asset’s floor.
【Farewell to the Token-Burning Model】
Many investors are accustomed to using discounted cash flow models to calculate the market value of public blockchains, treating fee burning as equivalent to stock buybacks. But Vitalik pointed out that for fee-burning revenue alone to support a market capitalization of hundreds of billions of dollars, Ethereum would have to operate like a multinational software company, investing an enormous amount—around 700,000 ETH—in research and development each year and artificially keeping Gas fees high to boost revenue. The cost would be sacrificing permissionlessness and decentralization, in violation of Ethereum’s fundamental mission.
He emphasized that EIP-1559’s fee-burning mechanism will remain in place, but the community need not panic if the amount burned stays below the amount issued over the long term. Even if future burns fall below 10% of what would be needed to offset new supply, ETH would still have strong appeal as a store of value. Ethereum’s true defenses lie in censorship resistance, open-source development, privacy protection, and system security. Even Anatoly Yakovenko, founder of competing blockchain Solana, publicly echoed this argument on X, saying that it makes no sense for a public blockchain to treat transaction fees as the product itself.
【Reframing the Narrative and Spot Market Implications】
Current Binance spot data shows ETH trading at around $2,227, down a slight 0.35% over 24 hours, with daily trading volume of about $127 million. Since the Dencun upgrade sharply reduced Layer 2 (L2) fees, daily burns on Ethereum’s mainnet have cooled considerably, and ETH’s supply has returned to inflationary growth, fueling valuation anxiety in the market.
Vitalik’s remarks are, in effect, a founder-led effort to guide the market toward revised expectations. Ethereum will no longer try to compete on fees and cash-flow performance, but will instead focus on becoming the trustless settlement layer for global finance. For ETH, this means in the short term that the network will not restrict scaling or push up usage fees just to prop up the burn rate. Over the long term, ETH’s valuation will gradually break free from the constraints of price-to-earnings ratios and return to its monetary role as global decentralized collateral.
【What to Watch Going Forward】
An objective way to assess whether this narrative shift succeeds is to look at whether capital remains committed on-chain. By the first quarter of 2027, watch whether the total amount staked in Ethereum’s validator contract can stay near its current high of more than 35 million ETH, and whether the issuance of tokenized assets by major financial institutions on the mainnet continues to outpace that of other high-throughput blockchains. If capital is willing to remain locked up long term in exchange for a premium on security and censorship resistance, ETH may be poised for an independent store-of-value rally. Conversely, if staking levels decline as capital exits, the market will need much longer to absorb the gap between its valuation models.
Personal views and information summary; not investment advice. DYOR.
$ETH #Ethereum
According to reports by crypto.news and The Block, Vitalik Buterin recently published a lengthy post on the social platform X, revisiting Ethereum’s long-term valuation framework. He made it clear that ETH should be viewed as a store-of-value asset, not a cash-flow token dependent on fee burning.
Vitalik said bluntly that over the past few years, the market had touted EIP-1559’s burn mechanism as a pillar of valuation, but that logic was never as solid as it seemed. He looked back at the period from 2021 to 2023, when Ethereum burned millions of ETH, but noted that much of that activity was driven by speculation within the crypto market and NFT hype. Once market conditions cooled, fees generated by this internal cycle quickly dried up, offering no real price support at the asset’s floor.
【Farewell to the Token-Burning Model】
Many investors are accustomed to using discounted cash flow models to calculate the market value of public blockchains, treating fee burning as equivalent to stock buybacks. But Vitalik pointed out that for fee-burning revenue alone to support a market capitalization of hundreds of billions of dollars, Ethereum would have to operate like a multinational software company, investing an enormous amount—around 700,000 ETH—in research and development each year and artificially keeping Gas fees high to boost revenue. The cost would be sacrificing permissionlessness and decentralization, in violation of Ethereum’s fundamental mission.
He emphasized that EIP-1559’s fee-burning mechanism will remain in place, but the community need not panic if the amount burned stays below the amount issued over the long term. Even if future burns fall below 10% of what would be needed to offset new supply, ETH would still have strong appeal as a store of value. Ethereum’s true defenses lie in censorship resistance, open-source development, privacy protection, and system security. Even Anatoly Yakovenko, founder of competing blockchain Solana, publicly echoed this argument on X, saying that it makes no sense for a public blockchain to treat transaction fees as the product itself.
【Reframing the Narrative and Spot Market Implications】
Current Binance spot data shows ETH trading at around $2,227, down a slight 0.35% over 24 hours, with daily trading volume of about $127 million. Since the Dencun upgrade sharply reduced Layer 2 (L2) fees, daily burns on Ethereum’s mainnet have cooled considerably, and ETH’s supply has returned to inflationary growth, fueling valuation anxiety in the market.
Vitalik’s remarks are, in effect, a founder-led effort to guide the market toward revised expectations. Ethereum will no longer try to compete on fees and cash-flow performance, but will instead focus on becoming the trustless settlement layer for global finance. For ETH, this means in the short term that the network will not restrict scaling or push up usage fees just to prop up the burn rate. Over the long term, ETH’s valuation will gradually break free from the constraints of price-to-earnings ratios and return to its monetary role as global decentralized collateral.
【What to Watch Going Forward】
An objective way to assess whether this narrative shift succeeds is to look at whether capital remains committed on-chain. By the first quarter of 2027, watch whether the total amount staked in Ethereum’s validator contract can stay near its current high of more than 35 million ETH, and whether the issuance of tokenized assets by major financial institutions on the mainnet continues to outpace that of other high-throughput blockchains. If capital is willing to remain locked up long term in exchange for a premium on security and censorship resistance, ETH may be poised for an independent store-of-value rally. Conversely, if staking levels decline as capital exits, the market will need much longer to absorb the gap between its valuation models.
Personal views and information summary; not investment advice. DYOR.
$ETH #Ethereum
