When you send ETH, you’re not just moving money—you’re paying for space on the blockchain. That’s where EIP-1559, a fundamental upgrade to Ethereum’s transaction fee system that introduced a dynamic base fee and burned a portion of transaction fees. Also known as Ethereum Improvement Proposal 1559, it changed how users pay for gas and how miners earn rewards. Before EIP-1559, fees were chaotic. You’d guess how much to pay, risk overpaying, or get stuck waiting hours because you underbid. It felt like bidding at an auction with no rules. EIP-1559 fixed that by replacing the first-price auction with a predictable base fee that adjusts automatically based on network demand.
The base fee is burned—destroyed permanently—instead of going to miners. That means less ETH enters circulation over time, which can make ETH scarcer. Miners still get tips, called priority fees, from users who want their transactions processed faster. This split keeps miners paid while reducing inflation. It also made fee estimation tools way simpler. Apps like MetaMask no longer need to guess—you see a clear estimate based on real-time network conditions.
EIP-1559 didn’t just tweak fees—it reshaped how people think about Ethereum’s economics. By burning fees, it turned every transaction into a deflationary event. When the network is busy, more ETH gets burned. When it’s quiet, less does. This created a natural balancing mechanism. It also made Ethereum more attractive to long-term holders and institutional investors who care about supply dynamics. And while some miners initially resisted the change, most adapted. Today, over 95% of Ethereum transactions follow EIP-1559’s rules.
What you’ll find here aren’t just explanations—they’re real stories. From users who saved hundreds in fees after the upgrade, to traders who saw how fee spikes vanished overnight, to developers who built tools that only work because of EIP-1559’s structure. You’ll also see how this upgrade connects to bigger trends: the rise of Layer 2s, the shift away from gas wars, and why Ethereum’s path to scalability started here. This isn’t theory. It’s what’s already happened—and what’s still unfolding.
Ethereum gas fees are the costs to send transactions or run smart contracts on the network. They're paid in ETH and vary based on demand. Learn how they work, why they changed in 2021, and how to save money.