Vitalik Buterin has pushed back on the idea that Ethereum’s economic story should rest mainly on fee burning. In a recent assessment, the Ethereum co-founder said ETH should be viewed as a long-term store of value, with its worth tied to decentralization, security, privacy and resistance to censorship. That is a shift in emphasis, not a change in protocol rules.
The fee-burning story loses force
Ethereum’s EIP-1559 update in 2021 introduced a base fee burn. When network activity and fee revenue were high, ETH removed from circulation could exceed new issuance, making the asset deflationary at times. The community called this ultrasound money. The term caught on because it gave ETH a simple economic narrative.
But the ground has moved. As scaling solutions spread, median transaction fees fell sharply. The article notes a drop from about 35 cents in January to 3.5 cents in October, even as daily transaction volume rose by more than 50%. Cheaper transactions are good for users. They also mean less ETH is burned and less revenue accrues to the network. So the old fee-burn story looks weaker than it did during peak congestion.
CROPS as the core case
Buterin argues that Ethereum’s real value should come from CROPS, meaning resistance to censorship and hijacking, open source code, privacy and security. He thinks these properties will matter more as artificial intelligence takes a larger role in economic systems. If automated agents and large platforms handle more transactions, users may place a premium on neutral, open and private infrastructure. That is a strategic argument about how to explain ETH to investors, not a proposal to rewrite monetary policy tomorrow.
I think the nuance matters. Buterin is not saying fee burns are useless. He is saying they should not be the main reason to hold ETH. The distinction is subtle, and it may be hard to sell in a market that likes simple metrics. Bitcoin supporters have criticized the approach, while some Ethereum community members say a more transparent and sustainable narrative is needed. Both reactions make sense. ETH’s value case has always mixed technical properties, network effects and market sentiment.
What changes now
For now, there is no immediate change to Ethereum’s monetary policy. The practical effect is mostly rhetorical: supporters may need to talk less about deflation and more about why censorship resistance and privacy matter. That case is harder to measure. It may also be more durable. The next test will be whether investors accept a slower, less mechanical story for ETH, especially if fees stay low and scaling continues.
