Vitalik Buterin wants Ethereum to embrace a store of value narrative, upsetting Bitcoin maxis. The crypto industry faces an uncertain future following the US elections.

Ethereum creator Vitalik Buterin says the network should promote ETH as a store of value, rather than as an asset that derives value from burning fees.

He argued in a thread that idea of “ETH as fee-burning token never was as strong as it seemed” and that optimizing for that would negatively impact Ethereum’s “decentralization and capture resistance.”

Instead, he argues that Ethereum’s value should come from stability provided by its focus on “decentralization and CROPS” — referring to censorship and capture resistance, open source, privacy and security — which he believes will be more highly valued in an “era of AI disruption.”

The 2021 EIP-1559 upgrade flipped Ethereum into deflationary mode for a time when fee revenue was sky high, leading to supporters, including the Bankless podcasters, touting Ethereum as “ultrasound money.”

But due to design choices, fees have kept falling along with revenue, making that narrative unsustainable. From January to October this year median transaction fees fell from 35 cents to 3.5 cents, as the number of daily transactions increased by more than half.

Some Bitcoiners, who hold BTC’s store of value status sacred, were scathing about Buterin’s thread. Held Media founder Dan Held derided Buterin’s comments as “ETH trying to pivot to Bitcoin’s SoV narrative after all of its previous narratives collapsed. ’” However, proponents note that Ethereum has not changed its monetary policy since The Merge in 2022, and each change has reduced, rather than increased, issuance.

Source link