Vitalik: Pursuing fee burning may require highly interventionist governance and drive up Gas prices

Odaily reports: Vitalik posted on X that if ETH's market cap of approximately $270 billion were to be supported through fee burning, Ethereum would be equivalent in scale to a large enterprise ranked around 55th by market cap, such as L'Oréal. He estimates that L'Oréal's annual R&D spending accounts for about 0.58% of its market cap; if Ethereum invested at that same ratio, it would need to allocate approximately 700,000 ETH per year through protocol funding, and validator revenue would decrease by about two-thirds. Vitalik stated that large enterprises require sustained investment and governance, and for Ethereum to remain competitive over the long term, it would need highly interventionist governance, which is difficult to reconcile with decentralization and capture resistance.

He also pointed out that optimizing fee burning may mean to some extent pursuing higher Gas prices, making the network unusable for some users. Pricing that maximizes the product of price and usage would result in less usage than pricing that maximizes usage within the resource limits of a secure blockchain.