How Does the Base Fee Adjust Automatically Based on Network Utilization?

EIP-1559 targets 50% block utilization. If a block is more than 50% full, the base fee increases by a maximum of 12.5% for the next block.

Conversely, if a block is less than 50% full, the base fee decreases by a maximum of 12.5%. This automatic, exponential adjustment mechanism ensures that the base fee rapidly reacts to changes in demand, keeping block utilization near the target and stabilizing transaction costs.