EIP-1559 Explained – How Ethereum’s Fee Upgrade Works

When working with EIP-1559, the Ethereum Improvement Proposal that overhauled transaction fees by adding a dynamic base fee and a voluntary priority tip. Also known as Ethereum fee upgrade, it aims to make gas prices more predictable and reduce fee volatility across the network.

The new model hinges on three core pieces. First, the base fee, a per‑block amount that automatically rises when blocks are full and drops when they’re empty. Second, the priority tip, a user‑defined extra that incentivizes miners to include a transaction quickly. Third, the fee market, which now burns the base fee, reducing ETH supply and aligning miner earnings with network demand. In practice, EIP-1559 changes the fee market by making the base fee non‑refundable and by giving users more control over transaction speed via the tip.

Key Concepts of EIP-1559

Understanding how the base fee is calculated is crucial: it adjusts each block based on the previous block’s gas usage, aiming for a target utilization of 50 %. This automatic adjustment means you no longer need to guess a gas price; the protocol does it for you. The priority tip, on the other hand, stays in the miner’s pocket, preserving the incentive for block producers even after the base fee is burned. Together, these changes reshape miner rewards, lower fee spikes during network congestion, and create a more transparent fee structure for everyday users.

Getting the hang of EIP-1559 can save you from overpaying on gas and help you time transactions more effectively. Below you’ll find a curated set of articles that break down the fee mechanics, compare pre‑ and post‑upgrade transaction costs, and offer practical tips for navigating Ethereum’s new fee landscape.