Arca CIO Jeff Dorman challenges Vitalik Buterin’s ETH store of value claims

Jeff Dorman, chief investment officer at crypto investment firm Arca, criticized Ethereum co-founder Vitalik Buterin’s position arguing for Ether (ETH) as a store of value, calling it “really misguided” during an appearance on the Unchained livestream on Thursday.

Buterin’s ETH store of value argument

Buterin recently outlined his stance in an X thread on November 8, suggesting that ETH serves better as a store of value than being primarily a “fee-burning token.” This refers to the role linked with EIP-1559, an upgrade introduced in August 2021 through Ethereum’s London upgrade, which burns the base fee from each network transaction.

Buterin argued that maximizing ETH’s fee-burning function would push Ethereum and ETH towards technical requirements that could threaten decentralization and resistance to capture by bad actors. Instead, he favors emphasizing ETH’s store of value characteristics as more compatible with Ethereum’s principles.

Dorman responded by stressing that a store of value claim essentially means positioning ETH as a type of currency, but he questioned that claim due to ETH’s limited utility outside the Ethereum network.

Buterin’s reasoning, Dorman asserted, requires assuming the disappearance of all other blockchain networks, a scenario he called unrealistic. He conceded that the decentralization ideals put forward by Buterin should remain Ethereum’s vision, but he described any philosophical case as “just that memetic social value again,” suggesting the token’s appeal depends largely on community perception and market sentiment rather than practical utility.

Network revenues and valuation concerns

Dorman highlighted recent Ethereum network revenue, citing data from DefiLlama that recorded around $6.2 million in revenue generated over the past 30 days, as of Thursday. Using a higher estimate of $10 million a month to account for potential variance, he calculated annual revenues of $120 million. Applying a 20-times earnings multiple, this method would value Ethereum’s network revenue at several billion dollars.

He pointed to estimates suggesting 200 million Ethereum wallets each hold an average of 0.1 ETH to pay for gas fees, together amounting to roughly $40 billion. Including other revenue sources, Dorman estimated a total of $45 billion to $50 billion in utility-based value, compared to ETH’s approximate total market capitalization of $246 billion, which he sourced from CoinGecko. On Friday, ETH traded at about $1,930, with a total valuation around $236 billion.

Layer one competition and application revenue

Dorman argued that the most successful base blockchain currently is Hyperliquid—a trading platform with its own blockchain infrastructure, built-in exchange, and stablecoin distribution. In contrast, he noted that on Ethereum, major applications such as decentralized exchange Uniswap or issuers like Circle are the entities retaining most of the network’s revenue.

He suggested that if the Ethereum Foundation or core developers believe applications rely deeply on Ethereum, the network could consider charging a “tax” on them. However, Dorman questioned whether major protocols would agree to such fees, and hinted that a significant rate might drive projects to migrate to less expensive blockchain networks.

Despite his criticism, Dorman acknowledged the potential for significant future growth, commenting that Ethereum “might be worth $10 trillion one day,” without specifying a timeframe.

Mini dictionary: Hyperliquid is a decentralized trading exchange with its own blockchain infrastructure. It integrates trading, stablecoins, and platform operations on the same chain, seeking to capture both network and application value within a single ecosystem.

Throughout the discussion, Dorman maintained that much of ETH’s market capitalization reflects social consensus and speculative hope, rather than revenues or essential network utility.