How Does EIP-1559 Change the Way Transaction Fees and Prioritization Work on Ethereum?

EIP-1559 introduced a mechanism where transaction fees are split into a 'Base Fee' and a 'Priority Fee' (tip). The Base Fee is algorithmically determined and burned, making it non-optional.

This provides predictable fee rates. The Priority Fee is optional and goes to the validator, acting as a tip to incentivize inclusion.

This change reduces fee volatility and makes fee estimation more reliable, improving user experience.