@VitalikButerin recently discussed ETH’s store-of-value properties. In reality, the market has already priced in an extremely high monetary premium. Quantitatively, over 90% of ETH’s market cap is supported by this monetary premium. How is this calculated? ETH market cap = fundamental valuation + implied monetary premium. Over the past year, protocol fees included in the model amounted to approximately $46.64 million. Compared to a market cap of about $259.7 billion: - At Tesla’s approximate P/E ratio of 394x, the fundamental value is around $18.36 billion, implying a monetary premium of 92.93%. - At Micron’s approximate P/E ratio of 9.3x, the fundamental value is around $430 million, implying a monetary premium of 99.83%. This does not mean that protocol revenue is unimportant to ETH’s valuation; on the contrary, the market is highly sensitive to fundamental pricing. Using BTC as the benchmark store-of-value asset, the ETH/BTC ratio can be used to observe ETH’s relative fundamental performance. Two interesting periods: 1. The 2021 DeFi and NFT boom. Within less than four months after EIP-1559 went live, over 1 million ETH were burned via fees. ETH briefly approached $4,900, and by Q4, ETH/BTC rose to approximately 0.0884. 2. After the implementation of EIP-4844. Costs for L2s to post data to mainnet dropped sharply, causing protocol revenue to plummet. By April 2025, ETH had fallen back to around $1,400—close to early 2018 levels—and ETH/BTC hit an extreme low of approximately 0.0177. If holding ETH offers little exposure to on-chain value creation, what is the rationale for long-term holding? Relying on sentiment to endure annual drawdowns of 50% or more? 😂 I fully agree with Ethereum’s core values, but I’m concerned about its commercialization capability—it needs better value capture and ecosystem growth to generate sustained demand. Of course, this isn’t solely Vitalik’s responsibility.