Vitalik Buterin Says Ether's Value Extends Beyond Fee Burns

Ethereum co-founder Vitalik Buterin argues Ether (ETH) should have a monetary role beyond transaction-fee burns, as Ethereum's 2026 burn total through Sunday, Nov. 8, stood far below its 2022 level.

Ethereum's EIP-1559 mechanism burns the base fees users pay for transactions. That supply reduction helped popularize a deflationary thesis: if burns match or exceed newly issued ETH, the supply can shrink. Lower gas fees as Layer 2 use expanded, along with slower speculative activity, reduced the fee income available to burn.

Ethereum burned about 19,200 ETH in 2026 through Nov. 8, valued at roughly $43 million. In 2022, it burned about 1.48 million ETH, worth around $3.6 billion at the time.

A burn-based valuation approach divides the annual dollar value of burned tokens by a discount rate. Annualizing the 2026 total to about $50 million and applying a 4% rate produces an implied value of roughly $1.25 billion. ETH's market capitalization was about $270 billion in the same period, more than 200 times that estimate. The difference shows how sharply the formula's result changes with fee income.

Buterin supports keeping EIP-1559 even if burns remain below 10% of new issuance. He has argued that pursuing higher burns by pushing up transaction fees could hurt Ethereum's decentralization and long-term development. He values the network's decentralization, resistance to censorship, open-source design, privacy and security.

His current argument places less weight on a predictable burn total as a measure of the token's monetary role.

That role also raises a question about supply policy. ETH has no fixed supply cap, and protocol upgrades can change its issuance rules. Ether is also used as collateral, a transaction asset and a native asset in financial infrastructure, which may support demand beyond fee burns but does not provide a single valuation formula.