How Does the EIP-1559 Upgrade Affect Ethereum’s Gas Fee Structure?

EIP-1559 introduced a mechanism where transaction fees are split into a 'base fee' and an optional 'priority fee' (tip). The base fee is algorithmically determined by network congestion and is burned, making the network deflationary.

The priority fee goes to the miner/validator. This change made gas fees more predictable and reduced the volatility of transaction costs for token transfers and contract interactions.