Ignas: Only Growing L1 Demand Lets Ethereum (ETH) Beat Bitcoin as Store of Value

Ignas Answers Buterin

Only if layer-1 transaction demand keeps growing can Ethereum (ETH) overtake Bitcoin and Zcash as crypto's preferred store of value, DeFi researcher Ignas argued in a Nov 9 post responding to Ethereum co-founder Vitalik Buterin. Buterin had called for Ethereum to prioritize strengthening its store-of-value function first, a position that reignited the network's long-running debate over where value should accrue. Ignas did not reject that goal. He accepted that Ethereum could prove the better store-of-value asset of the two, but attached a condition upstream of the monetary case: the base layer has to keep pulling in transacting users even as scaling systems absorb more of the network's activity. The store-of-value question is not academic for the chain either, because fee burn is one of the mechanisms that can push ETH supply toward deflation, and that mechanism only works while users keep paying to transact at the base layer. Issuance covers security today; the burn is what turns heavy usage into a shrinking supply. The disagreement is one of emphasis, not direction: both writers want the asset to hold value over time, and they differ on what produces that outcome. The exchange of views played out as the Ethereum (ETH) price slipped 3.7% over the past 24 hours, a reminder that holders are pricing the argument in real time. Zcash enters the comparison through privacy, one of the features Ignas says Ethereum's own roadmap will carry. For Ignas, the sequencing matters more than the slogan: a monetary premium built on a shrinking fee base would rest on supply policy alone, and he wants demand written into the same case rather than assumed.

Where the Demand Must Come From

Ignas built his case on three advantages he says Ethereum (ETH) already holds: native staking rewards paid in the asset itself, privacy features included in the development roadmap, and the potential deflation that follows when transaction gas fees are burned with each block. None of the three requires a new token or an outside custodian, which is the comparison he keeps returning to. Borrowing against Bitcoin or Zcash, in his description, often means wrapping the asset, relying on a bank or trusting a centralized exchange. On Ethereum, the same loop closes on-chain: a user can pledge collateral and swap against it inside one smart contract environment, with no intermediary between the steps. He treats that self-collateralization as a structural advantage rather than a convenience, since the asset backing a loan stays on the chain that issues it. Ignas also drew a line under why he wants Buterin to keep pressing the store-of-value message: not because he believes the base layer can never earn enough in fees to keep ETH's supply deflationary. His concern sits one step further out. Layer 2 networks move execution off the base chain, and scaling pushes the cost of a transaction down; the open question is whether market demand rises fast enough to replace what cheaper blocks give up, and whether the Ethereum community can lead that expansion rather than wait for it. In practice, his framing asks whether Ethereum's economic engine and its monetary narrative can reinforce each other, or whether one has to carry the other. The point sits at the center of the value-capture debate that has followed the network through every scaling cycle. Scaling has never been value-neutral for Ethereum (ETH): each round of capacity expansion lowers the price of blockspace and forces the question of what replaces the fee income.

The Unmeasured Condition

The exchange reduces to a demand test. Fee burn converts base-layer gas payments into supply contraction, so a store-of-value story that outlives its own fee engine leans entirely on issuance policy, which is the outcome Ignas is arguing against. Spot conditions point the other way in the short term: the asset slipped 3.7% in a day and, in our recent coverage, defended the $2,220 support level before the US CPI print. Ethereum technical analysis can frame the week, but the condition Ignas names moves on a slower clock: whether the community can manufacture transaction demand is not a figure any on-chain dataset settles today, and it is the one part of the case no one can yet measure.