KoinlyticsBefore August 2021, sending an Ethereum transaction was a bidding war. You picked a gas price, guessed whether it was high enough, and hoped. During launches or NFT drops, users routinely overpaid by 5-10x. EIP-1559 replaced that mess.
The two-part fee
- Base fee. An algorithmically-set price that every transaction in a block pays. Rises when the previous block was more than 50% full, falls when it was less. Users don't pick it. It is a fact of the block.
- Priority fee (tip). An optional tip the user attaches to move ahead of others. Miners/validators keep this.
Users submit a max-fee (base + tip cap) and a max-priority-fee (the tip). If base fee spikes, they pay less tip. If it collapses, they get a refund.
Why the base fee is burned
Every base fee ETH goes to a dead address. Gone forever. This ties Ethereum's monetary policy to network usage: heavy days burn a lot of ETH. Combined with the ~1 million ETH per year issued to validators, the net change is often negative. Since the Merge, roughly 40% of blocks have been net deflationary.
What this means at the wallet
Base fees are predictable. Your wallet's fee estimator is now accurate to within a few percent for the next block. You almost never have to think about "is this a launch day?" The main thing you tune is the tip if you need to be first in a specific block (arbitrage, liquidations, NFT mints).
Blobs and 4844 added a second market
EIP-4844 (Dencun, 2024) introduced a separate fee market for blob data used by L2 rollups. Blob gas is priced independently and burned separately. When rollups are quiet, blobs are almost free. When many rollups post at once, blob prices spike but it does not affect regular tx gas.
Numbers that matter
- Total ETH burned since EIP-1559: over 4.7 million (~$15B+ at typical prices).
- Average blocks per day where the base fee moves >20%: about 10.
- Peak base fee ever: 4560 gwei during May 2022 mania.