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1. Arca's investment chief rejects the ETH store of value thesis
Jeff Dorman, chief investment officer of digital asset manager Arca, said during a livestream interview on Thursday, November 13, that Ethereum co-founder Vitalik Buterin's argument for Ether (ETH) as a store of value is "really misguided." Dorman said his own valuation work supports only about $45 billion to $50 billion of ETH's worth, with the remainder amounting to "just social value or hopium."
The comments set one of the more prominent fund managers in the digital asset industry against the most influential figure in the Ethereum ecosystem on a basic question: what, exactly, gives ETH its value. Buterin has been steering the conversation toward ETH as a monetary asset that people hold for safety and permanence. Dorman, who manages money for clients and therefore has to justify the prices he pays, argues that this framing leaves most of the token's market value unexplained.
His critique has three parts. He questions whether a token with no use outside its own network can credibly claim to be money. He builds a rough model that attaches a dollar figure to the parts of ETH's value he considers measurable. And he proposes that Ethereum change how it captures the economic activity happening on top of it, by charging the applications that depend on it.
2. What did Vitalik Buterin argue about ETH?
Buterin argued that ETH is better suited to the role of a store of value than to the role of a fee-burning token. He laid out that position in a thread on X published on November 8, and the debate over it has carried on through the following week.
The fee-burning model he was pushing back against traces to EIP-1559, the change to Ethereum's fee market that took effect with the London upgrade in August 2021. Under that mechanism, the base fee attached to every transaction is destroyed rather than paid to the validators who process it. When network activity is heavy, more ETH is burned, which reduces the supply of the token. For several years, many investors treated that burn as the core of the investment case: more usage meant more burning, and more burning meant a scarcer asset.
Buterin's warning was that chasing the largest possible burn would push Ethereum toward designs that conflict with decentralization and with the network's ability to resist capture by any single group. In his framing, a network optimized to extract fees is not necessarily a network that stays neutral and open, and the second goal matters more. Treating ETH primarily as a store of value, by contrast, lets the network prioritize those principles while the token's worth rests on its role as a durable, trusted asset.
That shift matters for investors because it changes the yardstick. A fee-burning token can be judged on cash-flow style metrics, such as how much revenue the network produces and how much supply it removes. A store of value is judged more like gold or a currency, on whether people trust it to hold purchasing power over time. Dorman's objection is aimed squarely at the second yardstick.
3. Why Dorman says the store-of-value claim does not hold
Dorman's central objection is that calling something a store of value amounts to claiming it is a currency. A currency, in that sense, has to be useful and accepted beyond a single setting. ETH, he argued, has no function outside the Ethereum network. It pays for computation and settlement on Ethereum, but it has no role on rival blockchains or in the wider economy that would give it standing as money in its own right.
From that starting point, Dorman said, Buterin's position only works if one assumes that every other blockchain eventually fails. If ETH is to become the dominant monetary asset of the industry, competing networks with their own native tokens would have to fade away, leaving Ethereum as the only platform that matters. Dorman treated that as an assumption too heavy for an investment thesis to rest on.
He did not dismiss the values behind Buterin's argument. Dorman agreed that decentralization should guide Ethereum's long-term vision. His point was narrower: a valuation case built on philosophy rather than on measurable economics amounts to what he called "memetic social value." He used the phrase to describe the cool factor a token carries, the cultural pull that draws holders regardless of the underlying numbers.
Memetic value is not imaginary. It can sustain prices for long stretches, and it is a large part of why many crypto assets trade where they do. But from the standpoint of a fund manager, it is also the part of a valuation that is hardest to defend when sentiment turns, because there is no revenue stream or hard use case underneath it to fall back on.
4. How Dorman values ETH's network revenue
To put numbers behind his view, Dorman started with what Ethereum earns. He cited figures from DefiLlama, a widely used analytics platform that tracks fees and revenue across blockchains and decentralized applications, showing Ethereum produced roughly $6 million in revenue over the preceding 30 days. DefiLlama's data through Thursday put that figure at about $6.2 million.
Dorman then deliberately gave the network the benefit of the doubt. Allowing for the possibility that the past month was unusually quiet, he rounded monthly revenue up to $10 million. Annualized, that comes to $120 million a year.
He applied a 20x multiple to that annual figure, the kind of valuation multiple investors use to translate a stream of earnings into a price for the asset producing them. The result is a value in the range of a couple of billion dollars, a small fraction of what the market currently assigns to ETH.
The exercise illustrates why the fee-burning narrative has lost some of its appeal. Revenue on the Ethereum base layer has been modest, and even generous assumptions about it produce a figure that explains only a sliver of the token's market capitalization. For investors who want to value ETH like a business, the base-layer income statement alone does not get close to the current price.
5. The gas demand behind Dorman's $50 billion figure
The second component of Dorman's model comes from the demand to hold ETH in order to use the network. Every transaction on Ethereum requires gas, the fee paid in ETH to have a transaction processed, so anyone who wants to interact with the chain needs to keep some of the token on hand.
Dorman pointed to estimates that roughly 200 million Ethereum wallets each hold an average of 0.1 ETH for gas. Taken together, those balances are worth about $40 billion. This is a working-capital view of the asset: ETH has value because people need a float of it to do anything on the network, much as a business needs cash on hand to operate.
Adding the revenue-based figure to the gas-balance figure, Dorman arrives at about $45 billion to $50 billion of ETH's value that he says he can explain. He set that against a total of roughly $246 billion that he attributed to ETH, leaving around $200 billion he described as "just social value or hopium."
Market data on Friday put the numbers slightly differently. ETH traded near $1,930, giving it a total market value of about $236 billion according to CoinGecko, somewhat below the $246 billion Dorman used. The gap does not change the shape of his argument: by his accounting, the large majority of ETH's valuation rests on belief rather than on revenue or required usage.
6. Dorman points to Hyperliquid as the model layer one
Dorman's alternative vision for capturing value draws on a different network. He described Hyperliquid's model as "the only successful layer one," pointing to the way it combines a blockchain, a trading exchange and stablecoin distribution under one roof.
In that arrangement, the activity that generates money and the network that settles it are tightly integrated, so value created by users flows back to the platform itself. Hyperliquid built its reputation as a venue for trading perpetual futures, and its design keeps the economics of that trading close to the chain rather than handing them off to independent operators.
Ethereum works differently. Its design treats the base layer as neutral infrastructure on which independent teams build their own products. Dorman argued that the result is a network where applications, not the chain, collect the revenue. He named Uniswap, the largest decentralized exchange on Ethereum, and stablecoin issuers such as Circle, the company behind USDC, as examples of businesses that capture the economic value their users create while the base layer receives comparatively little.
7. Should Ethereum tax the apps built on it?
Dorman's answer is yes. If Ethereum believes the applications built on it genuinely need the network, he argued, it should start charging them and see what happens. Applications that value Ethereum's security and reach would stay and pay, while those that do not would move to a cheaper chain, revealing how much the network is truly worth to the businesses that use it.
He did not propose a specific rate. He said only that it would need to be "a pretty high number" to make a difference. That vagueness reflects how far such an idea sits from Ethereum's current design, which has no built-in mechanism for levying a protocol-level charge on particular applications beyond the gas fees every user pays.
The proposal runs directly into the tension Buterin described. A network that starts taxing specific applications takes a more active, extractive role in its own economy, the kind of shift Buterin cautioned could pull Ethereum away from neutrality and decentralization. Dorman's view is that without some form of value capture, the token's price will continue to depend mostly on sentiment.
8. What the debate means for ETH holders
Despite the sharp language, Dorman did not write off Ethereum's upside. He said Ethereum "might be worth $10 trillion one day," a figure many times its current market value. His argument is about how that value would be earned, not about whether the network can grow.
For holders, the exchange highlights two competing ways of thinking about ETH. Buterin's camp asks investors to treat the token as a monetary asset whose worth rests on trust, durability and the principles of an open network, accepting that this kind of value is difficult to model. Dorman's camp asks for a measurable link between the network's activity and the token's price, and argues that, today, that link explains only around a fifth of ETH's valuation.
The disagreement is likely to keep surfacing as the Ethereum community weighs how the network should evolve. Whether the protocol leans further toward neutrality, as Buterin prefers, or toward stronger value capture, as Dorman advocates, will shape the investment case for ETH, and for the gap between the $50 billion Dorman can justify and the far larger sum the market is currently willing to pay.