What is EIP-1559?

The 2021 Ethereum change that replaced a blind fee auction with a protocol-set base fee that is burned, plus an optional tip to the proposer.

It also introduced a flexible block size, targeting half the maximum gas per block and adjusting the base fee up or down by up to 12.5% per block to steer back toward that target (source: EIP-1559). The effects most people notice are more predictable fee estimates and the burn, which offsets part of new issuance. Many Ethereum-compatible chains and layer 2 networks copied the mechanism, so the same base fee and tip fields appear across them.

The frequent misreading is that EIP-1559 made fees cheaper. It did not. It made them legible. Before the change you guessed a single gas price and hoped; after it, the protocol tells you the floor and you decide only how much to add on top.

How it works

Every block carries a base fee that the protocol computes from the previous block's gas usage. The rule is mechanical and identical on every node:

1. If the previous block used exactly the gas target, the base fee stays the same.
2. If it used more, the base fee rises, by at most 12.5% when the block was completely full.
3. If it used less, the base fee falls, by up to 12.5% when the block was empty.

The base fee is burned rather than paid to anyone (source: EIP-1559). On top of it you set a priority fee, the tip that actually persuades a block proposer to include your transaction. You also set a maximum fee per gas, which caps your total exposure; anything between the base fee plus tip and that maximum is refunded.

Because blocks can stretch to twice the target, a burst of demand is absorbed by larger blocks first and only then by a rising base fee. That is why the fee curve moves in a visible ramp over several blocks rather than jumping unpredictably from one transaction to the next.

Example

Illustrative arithmetic for a plain transfer, which costs 21,000 gas. Suppose the base fee is 20 gwei and you set a priority fee of 2 gwei with a maximum of 40 gwei. You pay 22 gwei per gas, so the total is 21,000 multiplied by 22 gwei, which is 0.000462 ETH. Of that, 0.000420 ETH is burned and 0.000042 ETH goes to the proposer. The 40 gwei maximum was never reached, so nothing extra was charged.

Why it matters when you buy

Withdrawing a token from an exchange to your own wallet costs a network fee set this way, and that fee can dwarf the trading fee on a small purchase. Check the current cost of moving an asset before deciding where to hold it; see the chain pages for network characteristics and the fee comparison for what venues charge on top.

Related terms

base fee — the burned floor this created, priority fee — the tip you control, gas — the unit being priced, gwei — the denomination fees are quoted in, burn — where the base fee goes, eip — the proposal format itself.

Questions

Did EIP-1559 lower Ethereum's fees?

No. It changed how fees are set and made estimates far more reliable, but the price still rises with demand for block space. Lower fees came from layer 2 networks, not from this change.

Where does the burned base fee go?

Nowhere. The ether is destroyed, permanently reducing supply, which offsets part of the new ether issued to validators.

Do other chains use the same mechanism?

Many Ethereum-compatible chains and rollups adopted it, so wallets show the same base fee and tip fields there. The parameters differ per chain, so read the chain's own documentation for its target and limits.