No verified Buterin statement on store of value; Ethereum fee-burning mechanism continues
Key Facts
A statement attributed to Vitalik Buterin about strengthening ETH’s role as a store of value or keeping fee burning below the break-even point with issuance could not be verified. The referenced Crypto.news and Crypto Briefing pages were unavailable, and no original statement or reliable coverage of it could be found. It therefore cannot be confirmed that Buterin called for shifting the focus from supply scarcity to network security and stability. Nor can a specific estimate of the burn rate or its effect on supply be attributed to him. What can be confirmed here is Ethereum’s fee mechanism and the factors that determine the net change in ETH supply.
EIP-1559 provides for a base fee that changes with network congestion, and that base fee is burned when paid. Validators retain priority fees, according to the Ethereum proposal document. Thus, fee burning does not mean that all fees paid on the network are removed from supply. The burn mechanism took effect with the London upgrade in August 2021, and Ethereum’s page says it has remained unchanged since the Merge. The amount burned continues to be linked to network activity and demand for its use.
The net change in ETH supply is determined by the balance between issuance and burning, according to Ethereum’s page on issuance after the Merge. Validators receive rewards on the consensus layer, while issuance on the execution layer has been zero since the Merge. Ethereum’s page estimates validator issuance at about 1,700 ETH per day, based on roughly 14 million ETH staked, with the actual figure varying according to the total amount staked. Higher or lower burning can therefore change net supply, but the continuation of burning alone does not prove that supply is always contracting. The final direction depends on a comparison of actual issuance with the amount burned through network fees.
The Dencun upgrade introduced temporary data space known as blobs to reduce the cost of storing transaction data for rollup networks, according to Ethereum’s FAQ. The upgrade was activated on mainnet on 13 March 2024 at 13:55 UTC. Ethereum’s roadmap page says rollups began using blob storage after implementation, reducing transaction costs for users and enabling millions of transactions to be processed through this space. This places lower usage costs in the context of the fee mechanism, as burning changes with network demand. But this information does not establish the validity of the statement attributed to Buterin about store of value or the burn rate.