Arca CIO Jeff Dorman Criticizes Vitalik Buterin's ETH Store-of-Value Argument

Arca Chief Investment Officer Jeff Dorman called Ethereum co-founder Vitalik Buterin's argument for $ETH as a store of value "really misguided" during an Unchained livestream on Thursday ¹. Dorman stated that Buterin's thesis leans on philosophical appeal rather than financial utility, claiming that fundamental metrics currently support only a fraction of the network's market valuation ¹.

Buterin previously argued in a social media thread on Nov. 8 that $ETH functions more effectively as a store of value than as a fee-burning mechanism under EIP-1559, as detailed when Vitalik Buterin argued ETH value relies on decentralization over fee burns ¹. Buterin asserted that optimizing network design around burning transaction fees threatens Ethereum's decentralization and capture resistance ¹. In response, Dorman argued that a store of value asserts currency status, which fails because ETH lacks utility outside the Ethereum network, requiring an assumption that competing blockchains will disappear ¹.

Valuation Math and Application Revenue

Dorman presented a valuation model asserting that Ethereum's fundamentals justify between $45 billion and $50 billion of its market capitalization ¹. Citing DefiLlama figures showing roughly $6 million to $6.2 million in 30-day network revenue, Dorman annualized an assumed $10 million monthly run rate to $120 million ¹. Applying a 20-times multiple yielded several billion dollars in network cash flow value ¹. He added an estimated $40 billion derived from approximately 200 million wallets holding an average balance of 0.1 ETH for gas fees ¹. Based on a total market size of roughly $246 billion, Dorman argued that nearly $200 billion of Ethereum's valuation represents "just social value or hopium" ¹. At the time of writing, ETH traded at $1,910.

Dorman also criticized Ethereum's value capture model relative to native applications, observing that protocols like Uniswap and stablecoin issuers like Circle retain the majority of generated revenue ¹. Pointing to Hyperliquid's integrated model across execution, trading, and distribution, Dorman suggested that Ethereum test application loyalty by directly taxing hosted protocols to determine whether they remain on the network or migrate to lower-cost competing chains ¹.