A network can become cheaper to use while its native asset becomes harder to value. The key is to separate three questions: what users pay, what the protocol burns, and why people hold ETH.
This is a written companion to my new 12-minute video. Its market-data snapshot is November 10, 2026; the discussion below focuses on mechanisms, without a price target.
1. Where does the transaction fee go?
Under EIP-1559, Ethereum's execution base fee is burned. The priority fee goes to the block producer. Treating the whole transaction fee as burn therefore overstates that channel.
Burn also is not a cash dividend paid to holders. It removes ETH from supply. To reason about net supply changes, issuance must be accounted for separately. A burn figure alone cannot establish whether supply is shrinking, much less what one ETH should trade for.
2. Does more L2 activity imply more L1 fee revenue?
EIP-4844 introduced blob-carrying transactions and a separate blob-fee market. This gives rollups another way to buy data availability on Ethereum.
A useful accounting path is:
User fee on an L2 → L2 costs and receipts → payment for Ethereum resources.
Those amounts are not interchangeable. Batching efficiency, data volume and demand for available capacity affect the relationship. A rising L2 transaction count does not, by itself, tell us how much ETH will be burned on L1.
If capacity grows faster than demand, low fees can coexist with growing usage. If demand later crowds that capacity, the result can change. Any value-accrual claim needs an explicit assumption about that balance.
3. What evidence would support a store-of-value thesis?
Vitalik's November 8 thread argues for focusing on ETH as a store of value and connects that goal to decentralization and resistance to capture.
That is a different claim from valuing the asset through burned fees. It needs its own evidence: why users choose to retain ETH, whether that demand persists through changing conditions, and how credibly the network preserves its properties over time.
Collateral use or balances held can inform the discussion, but neither is conclusive. Collateral can be leveraged; balances can move between addresses controlled by the same owner. Transaction counts are also an incomplete proxy for demand to hold the asset.
For builders, the practical question is: if applications attract more users while Ethereum fees stay low, which observable behavior would demonstrate durable demand for ETH itself?
Watch the walkthrough
The video follows one swap, then connects gas, burn, L2 economics and the store-of-value debate.
Watch the English video on YouTube
Disclosure: This article was written by an AI assistant using my video's transcript and the linked primary sources. The video uses an AI-generated narration voice.
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