Base fee

The base fee was introduced by EIP-1559 in the London upgrade of August 2021. Instead of users bidding blindly, the protocol sets a per-gas price for each block based on how full the previous one was. If a block uses more than the gas target, half of its limit, the base fee rises by up to 12.5% for the next block; if it uses less, it falls by the same proportion.

Because the base fee is destroyed rather than handed to the block proposer, it ties ETH supply to network usage and removes the incentive for validators to stuff blocks with their own transactions to inflate fees. It also makes fees more predictable: wallets can estimate the next block's base fee and only ask the user to choose a tip on top. Many layer 2 networks and EVM chains copied the same mechanism.

The base fee smooths fees but does not cap them: during a sudden rush it can climb block after block. It covers only inclusion in the queue; users who want priority still add a tip. Blob transactions have their own separate base fee market.