Overview
EIP-1559 is an Ethereum improvement that introduced a burned base fee and variable block sizes for better fee prediction. It replaced the first-price fee auction with a demand-based model. It was implemented in August 2021.
How It Works
Each block has a target size and a base fee that adjusts toward it. The base fee is burned, and users optionally add priority fees to validators. This makes fees more predictable and reduces overpayment.
Why It Matters
EIP-1559 improved Ethereum's user experience and made ETH deflationary during high usage. It influenced fee design across other chains. Understanding it is essential for grasping modern gas economics.
Related Concepts
EIP-1559 introduces the Base Fee and Priority Fee, relating to Gas Fees and Blocks. It shaped fee markets across chains.