How Does EIP-1559 Relate to the Ethereum Fee Market?
EIP-1559 reformed the Ethereum fee market by introducing a 'base fee' that is burned and automatically adjusts based on network congestion. Users also pay an optional 'priority fee' (or 'tip') to miners for faster inclusion.
This makes fee estimation more predictable and reduces the volatility of transaction costs compared to the previous simple auction system.
Glossar
Eip-1559
Upgrade ⎊ EIP-1559, or Ethereum Improvement Proposal 1559, represents a significant upgrade to the Ethereum network's transaction fee mechanism.
Base Fee Adjustment
Adjustment ⎊ Base fee adjustments, prevalent in cryptocurrency exchanges and increasingly mirrored in options and derivatives markets, represent dynamic modifications to transaction costs designed to maintain network health and operational efficiency.
Ethereum Fee Market
Priority ⎊ The Ethereum fee market, fundamentally, represents a dynamic equilibrium between block space demand and supply, influencing transaction costs and network congestion.