Term
EIP-1559
EIP-1559 is the 2021 Ethereum upgrade that restructured transaction fees into a "base fee" (algorithmically adjusted per block and burned) plus an optional "priority fee" (tip to the validator) — making fees more predictable and starting the ETH burn.
EIP-1559 was an Ethereum protocol upgrade activated in August 2021 that redesigned how transaction fees work. Before it, every transaction just bid a "gas price" and miners picked the highest bids. After it, each block has a base fee that algorithmically adjusts up or down based on demand (targeting 50% block fullness), plus an optional priority fee that goes to the validator as a tip.
The base fee is burned — permanently destroyed rather than paid to the validator. This links Ethereum issuance to network demand: heavy usage burns more ETH than issuance creates, making ETH deflationary during high-demand periods. It also made fees more predictable, since the base fee is knowable ahead of time.
Modern Ethereum wallets present two knobs: "max fee" (base fee + priority fee cap) and "priority fee" (tip). Users usually accept the wallet's automatic estimate; power users tune the priority fee for faster inclusion during congestion.
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