Lubin Makes the Case for Ether as a Store of Value

Ethereum co-founder Joseph Lubin argued on Nov. 11 that Ether (ETH) can function as a store of value, resting the case not on scarcity rhetoric but on the asset's operational role inside Ethereum's financial system. His statement, published three days after a related argument from fellow co-founder Vitalik Buterin, marks the most explicit attempt yet by Ethereum's leadership to position ETH alongside — and arguably ahead of — Bitcoin and gold as monetary collateral.

"Gold and BTC are high-powered money and excellent stores of value. ETH goes further," Lubin wrote.

What does Lubin's argument actually rest on?

Three pillars support the claim. First, Ether's use as collateral: ETH backs positions across Ethereum's lending markets and trading venues, functioning as the base asset of a dollar-denominated credit stack. Second, programmability: unlike gold or Bitcoin, Ether executes inside smart contracts, which lets it be deployed as collateral, staked for validation and composed into financial instruments without intermediaries. Third, its embedded position in Ethereum's financial ecosystem, where it serves as the settlement asset and gas unit for every transaction on the network.

Lubin framed the argument against a macroeconomic backdrop he expects to bring high inflation and what he described as extreme economic and social volatility. In that context, his claim amounts to a positioning statement: practitioners building on Ethereum should treat ETH not merely as a volatile operating asset but as the system's reserve instrument.

How does Buterin's Nov. 8 argument connect?

Buterin made a related case on Nov. 8, arguing that Ether's monetary role should carry more weight in any valuation framework than fee burning does, while still supporting retention of EIP-1559, the upgrade introduced in 2021 that restructured Ethereum's fee market. The two statements are complementary rather than identical. Buterin's version disciplines the narrative: ETH's value proposition does not reduce to a deflationary supply schedule.

The technical detail matters here. EIP-1559 burns the base fee portion of every Ethereum transaction, but it does not cap the ETH supply. Validators receive newly issued ETH as rewards, and the quantity burned varies with network demand. The net balance between issuance and burning determines whether total supply expands or contracts in any given period. In plain terms, ETH is not hard-coded to be deflationary; it becomes scarcer only when fee burning exceeds validator issuance — a condition that depends on usage, not protocol design.

What does this change for practitioners?

For treasurers, market makers and protocol designers, the co-founders' argument supplies a framework for treating ETH as productive collateral rather than a speculative instrument: its monetary premium, if one accrues, derives from its function in the system, not from scarcity alone. For policy watchers, the statements also preview how Ethereum's leadership will frame ETH in any future regulatory discussion of what counts as a monetary asset rather than a security.

The open question is empirical, not rhetorical. Whether Ether sustains a store-of-value role depends on sustained demand for Ethereum block space and collateral, since issuance-versus-burning dynamics leave the supply outcome to the market.