How Is the ‘Base Fee’ Determined under Ethereum’s EIP-1559?

The Base Fee is algorithmically calculated based on the difference between the previous block's size and the target block size. If the previous block was over the target, the Base Fee increases by up to 12.5%.

If it was under, the Base Fee decreases. This mechanism dynamically manages block utilization to keep it close to the target capacity and makes fee prediction easier.