Vitalik Buterin says ETH's pitch shouldn't be about burning fees

Vitalik Buterin wants Ethereum to stop leaning on the burn. In a post on X, the Ethereum co-founder argued the network should build ETH's identity around being a store of value, not around being a "fee-burning token." The burn isn't going anywhere — what he wants retired is the idea that it's what gives ETH its value.

The mechanics first: EIP-1559, rolled out in 2021, permanently destroys a slice of the fees users pay to transact on Ethereum. Buterin backed keeping that mechanism exactly as it is. His complaint is with the community's habit of treating the burn as ETH's core appeal.

He told holders not to sweat it if long-term burns stay below 10% of the break-even level — a bar he called sustainable inside Ethereum's wider economics. The monster burns of 2021 to 2023, he argued, came mostly from activity inside crypto itself, so they shouldn't be read as a real valuation floor. To fund ETH's roughly $270 billion market cap through protocol-level fees alone, he estimated the network would need around 700,000 ETH a year.

That estimate came with a warning. Chasing fee burns hard enough to hit those numbers would drag Ethereum toward centralization, Buterin said, threatening the decentralization and governance principles the project runs on. The current picture backs up his point: burns have covered only about 2.07% of new ETH issuance, meaning total supply is still growing on net.

This isn't a first-time take. In 2025 he floated backing ETH's value through scaling and Layer 2 incentives, and the new comments dial the burn down further. As more activity shifts to Layer 2s, fewer fees hit the main chain and the burn shrinks on its own. He also pointed at coming AI-driven disruption, arguing an asset tied to a decentralized network — one that doesn't depend on any single company or institution — could look attractive in that world.

For investors, the practical shift is which numbers get watched. If the burn fades from the value story, daily burn dashboards and short-term transaction spikes carry less weight. The tension: an asset with net supply growth has to earn its place on decentralization and credible neutrality rather than scarcity, the way Bitcoin leans on a fixed cap. And any future proposal to fund the protocol through aggressive fee capture now has to answer Buterin's centralization concern head-on.