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Clear out junk files and repair common Windows errorsFree Scan →Scan for outdated or missing drivers - takes under a minuteDriver Scan →Ethereum’s EIP-1559 system burns the base-fee portion of a transaction and pays the priority-fee portion, or tip, to the validator that includes it. The amount shown as a maximum fee is only a ceiling: your final charge depends on the inclusion block’s base fee, the effective tip, and the gas your transaction actually uses. Any gas reserved but not used is refunded.
That distinction lets you read a wallet quote or transaction receipt correctly. You are not paying the entire gas limit multiplied by maxFeePerGas, and the validator is not receiving the base fee.
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What EIP-1559 burns
EIP-1559 divides the per-unit gas price into a protocol-set base fee and a user-specified priority fee. The base fee is mandatory for an eligible transaction in a block. EIP-1559 states: “The base fee is always burned (i.e. it is destroyed by the protocol).” Read the full proposal at EIP-1559 on the Ethereum Improvement Proposals site.
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1Clear out junk files and repair common Windows errors2Fix the driver behind crashes, sound loss and screen glitches3Repair Windows errors before they cause bigger problemsBurning means the protocol does not transfer that ETH to a person, company, or validator. The ETH is removed from the supply that would otherwise remain in circulation. The burn applies to the base-fee amount for gas actually used, not to every ETH a wallet reserves and not automatically to the whole transaction balance.
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The priority fee, often called a tip, has a different destination. It is credited to the block producer. Ethereum now uses proof of stake, so that producer is a validator rather than a miner; Ethereum’s proof-of-stake documentation explains the validator context at Ethereum.org’s proof-of-stake guide.
| Component | Who determines it | What it does | Where it goes |
|---|---|---|---|
| Base fee | Protocol, for each block | Minimum per-gas amount required for inclusion | Burned for gas used |
| Priority fee (tip) | User, subject to the transaction cap | Incentivizes prompt inclusion | Validator that produces the block |
maxFeePerGas |
User | Maximum total per-gas price the user authorizes | Not a destination or a final charge by itself |
| Gas limit | User or wallet estimate | Maximum gas units the execution may consume | Unused units are not charged |
The terminology matters: calling the entire transaction fee “burned” wrongly suggests that validators receive nothing, while calling the entire amount validator income wrongly includes ETH that the protocol destroys.
How the protocol sets the base fee
The base fee is calculated for each block from the previous block’s gas use compared with a protocol-defined target. When demand pushes usage above that target, the next base fee rises. When usage is below the target, it falls. This adjustment gives the network a predictable congestion signal instead of leaving the entire per-gas price to a first-price bidding contest.
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Ethereum.org summarizes the validity rule this way: “The base fee is set by the protocol—you have to pay at least this amount for your transaction to be considered valid.” The gas guide, including its fee formulas and example, is available at Ethereum.org’s gas and fees overview.
A wallet can suggest a tip and a fee cap, but it cannot choose a base fee below the amount required by the block in which the transaction is included. Because the base fee is tied to block demand, a quote can change while a transaction waits in the mempool. The eventual inclusion block, not the moment you first opened the wallet, determines the base-fee portion of the charge.
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The fee fields in an EIP-1559 transaction
EIP-1559 transactions are commonly called type-2 transactions. Ethereum documentation identifies the 0x02 type marker and the associated fee fields in its transaction reference at Ethereum.org’s transactions documentation.
maxFeePerGas: your total per-gas ceiling
maxFeePerGas is the highest amount per gas unit that you authorize for the base fee plus the priority fee. It is a cap, not a promise that the protocol will take that amount. If the inclusion block’s base fee is lower, the unused room under the cap is not charged.
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maxPriorityFeePerGas limits the tip per gas that can reach the validator. The effective tip can be lower when the fee cap leaves insufficient room after the base fee is accounted for.
The effective priority fee
For each gas unit used, the protocol calculates the tip as:
effective priority fee = min(maxPriorityFeePerGas, maxFeePerGas − baseFeePerGas)
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If the fee cap does not leave enough room for the requested tip, the lower value applies. A transaction whose maximum fee is below the required base fee cannot be included under those terms.
Gas used versus gas limit
The gas limit is a ceiling on execution. The actual bill uses gasUsed, the quantity consumed by the successful execution, rather than automatically charging the full limit. For a type-2 transaction, the total paid is:
gasUsed × (baseFeePerGas + effectivePriorityFeePerGas)
The base-fee part of that result is burned, and the effective-priority-fee part is credited to the validator. Gas units below the limit are refunded instead of being treated as a fee.
What happens from a wallet quote to final settlement
- The wallet chooses transaction parameters. It estimates a gas limit and proposes a
maxFeePerGasandmaxPriorityFeePerGas. These values authorize a maximum; they do not establish the final amount. - The transaction waits for a block. The base fee may move while the transaction is pending because it is recalculated from block demand. Inclusion requires the chosen maximum fee to cover the base fee in the selected block.
- The protocol determines the effective tip. It compares the requested priority fee with the room left under the maximum fee. The smaller permissible amount becomes the tip per gas.
- Execution determines gas used. A simple transfer normally consumes less gas than a complex contract call. The final calculation uses the units consumed by execution, not merely the wallet’s upper limit.
- The fee is split. Used gas multiplied by the base fee is destroyed by the protocol. Used gas multiplied by the effective tip is paid to the validator producing the block.
- Unused allowance remains with you. Any difference between the gas limit and gas used is not part of the final fee. Likewise, any gap between the maximum fee and the actual per-gas price is not collected.
Worked example: a 21,000-gas transfer
Ethereum.org uses a simple illustrative transfer to show the arithmetic. The transfer consumes 21,000 gas, the base fee is 10 gwei per gas, and the user adds a 2 gwei tip. These are teaching figures, not a live network quote.
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| Calculation | Result |
|---|---|
| Base-fee rate | 10 gwei per gas |
| Priority-fee rate | 2 gwei per gas |
| Total rate actually paid | 12 gwei per gas |
| Gas used | 21,000 |
| Total fee | 21,000 × 12 = 252,000 gwei = 0.000252 ETH |
| Amount burned | 21,000 × 10 = 210,000 gwei = 0.00021 ETH |
| Amount credited to validator | 21,000 × 2 = 42,000 gwei = 0.000042 ETH |
The example separates destination as well as amount: 0.00021 ETH disappears through the burn, while 0.000042 ETH is the validator’s tip. If the transaction had used fewer than 21,000 units, both portions would have been lower because the calculation follows gas used.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to read a fee quote or transaction receipt
When reviewing a pending quote, first identify the gas limit and the two fee caps. Treat the product of gas limit and maximum fee as a worst-case authorization under those settings, not as the amount already spent. It can exceed the eventual charge for two independent reasons: the execution may use fewer gas units, and the inclusion block may require less than the maximum per-gas fee.
After confirmation, use the receipt or explorer’s actual-fee display to find the gas used and the effective per-gas price. Multiply those values to check the total ETH debited. To understand the destinations, separate that total into the base-fee portion and the effective-tip portion using the inclusion block’s base fee. The first portion was burned; the second went to the validator.
A pending transaction can therefore show a generous maximum without implying an equally large payment. The cap protects the transaction from being underpriced if congestion rises, while the settlement calculation prevents the unused allowance from becoming a charge.
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Common mistakes and how to avoid them
- Counting the entire fee cap as the bill. Check gas used and the inclusion block’s base fee before judging what the transaction cost.
- Assuming validators receive the base fee. Only the effective priority fee is their payment; the base-fee component is destroyed.
- Calling every gas unit burned. The burn is calculated for gas actually used. A refunded unit creates no fee and therefore no corresponding burn or tip.
- Confusing a requested tip with the effective tip. If the maximum fee leaves less room after the base fee, the protocol pays the lower amount.
- Assuming the burn guarantees a shrinking ETH supply. Burn reduces supply relative to a no-burn system, but the net change over a period also depends on ETH issuance.
Why the burn matters for ETH supply—and what it does not prove
Destroying the base-fee portion removes ETH that would otherwise remain in circulation. In that sense, higher fee activity can produce more burn because more gas is consumed and each used unit contributes its block’s base fee to the destroyed amount.
That mechanism alone does not establish that total ETH supply is shrinking at every moment. Net supply is the result of burn and issuance over the specific period being measured. A period with substantial burn can still have a net increase if issuance is larger; a period with lower issuance and sufficient burn can have a net decrease. Without a defined time window and current burn and issuance measurements, statements that ETH is permanently deflationary or that burning guarantees a higher price go beyond what EIP-1559 establishes.
A compact checklist for evaluating your next transaction
- Confirm that the transaction uses EIP-1559 fee fields: a maximum fee and a maximum priority fee.
- Compare the maximum fee with the current base fee shown for the block environment in which you expect inclusion.
- Read the gas limit as an execution ceiling, not as proof of consumption.
- After confirmation, record gas used, the actual per-gas price, and the inclusion block’s base fee.
- Compute the total from gas used and the actual per-gas price, then divide the result into burned base fee and validator tip.
- Keep supply conclusions separate from transaction arithmetic: the burn is real, but net ETH supply requires issuance for the same period.
EIP-1559 was proposed on April 13, 2019, and its accounting model remains the basis for interpreting these type-2 fee fields. The authoritative specification is the EIP-1559 proposal; implementation details and terminology are also maintained in Ethereum.org’s gas guide and transaction documentation.
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