Vitalik has clearly expressed a preference for positioning ETH as a store-of-value asset (SoV),
gradually moving away from the “fee-burning token” label that the market previously embraced.
His core reasoning centers on three points:
Fragile valuation anchor: A valuation floor built solely on fee burning is not as solid as models have suggested.
Distorted protocol optimization: If the network is adjusted with increasing fee burns as a priority, the end result will erode decentralization and censorship resistance.
Returning to its core positioning: The SoV properties better align with Ethereum’s long-term strengths in security, permissionlessness, privacy, and censorship resistance.
He also noted that even if the burn rate falls below the deflationary equilibrium threshold, EIP-1559 itself will remain as a transaction-pricing mechanism.
This reflects a renewed understanding of Ethereum’s real-world liquidity landscape.
Since the Dencun upgrade, L2s have siphoned off a large share of mainnet execution-layer fees, making it difficult for ETH to keep relying on the purely deflationary “Ultra Sound Money” narrative to support its valuation.
Once the market gets used to valuing ETH using the cash-flow and price-to-earnings logic of traditional software companies, competition from various low-fee chains could easily put its valuation potential on the back foot.
Giving up the fixation on “burn-driven deflation” is essentially a deliberate move to escape the single-minded cash-flow trap.
Bringing the narrative back to the security of the global settlement layer and monetary premium shows that Ethereum is beginning to accept the reality of application-layer fees being diluted, and is trying to refocus competition on network neutrality and the asset’s monetary hardness.
For a market accustomed to the “burn is bullish” logic, this shift in narrative focus will require a gradual repricing process.
NFA, DYOR.
$ETH
gradually moving away from the “fee-burning token” label that the market previously embraced.
His core reasoning centers on three points:
Fragile valuation anchor: A valuation floor built solely on fee burning is not as solid as models have suggested.
Distorted protocol optimization: If the network is adjusted with increasing fee burns as a priority, the end result will erode decentralization and censorship resistance.
Returning to its core positioning: The SoV properties better align with Ethereum’s long-term strengths in security, permissionlessness, privacy, and censorship resistance.
He also noted that even if the burn rate falls below the deflationary equilibrium threshold, EIP-1559 itself will remain as a transaction-pricing mechanism.
This reflects a renewed understanding of Ethereum’s real-world liquidity landscape.
Since the Dencun upgrade, L2s have siphoned off a large share of mainnet execution-layer fees, making it difficult for ETH to keep relying on the purely deflationary “Ultra Sound Money” narrative to support its valuation.
Once the market gets used to valuing ETH using the cash-flow and price-to-earnings logic of traditional software companies, competition from various low-fee chains could easily put its valuation potential on the back foot.
Giving up the fixation on “burn-driven deflation” is essentially a deliberate move to escape the single-minded cash-flow trap.
Bringing the narrative back to the security of the global settlement layer and monetary premium shows that Ethereum is beginning to accept the reality of application-layer fees being diluted, and is trying to refocus competition on network neutrality and the asset’s monetary hardness.
For a market accustomed to the “burn is bullish” logic, this shift in narrative focus will require a gradual repricing process.
NFA, DYOR.
$ETH