Base Fee

A Base Fee is Ethereum's dynamic minimum fee per unit of gas. Transactions must pay at least this fee for inclusion in a block. EIP-1559 introduced it in August 2021. The protocol burns the Base Fee, removing ETH from circulation to reduce supply.

Ethereum targets blocks at half fullness, about 15 million gas units. The Base Fee adjusts automatically. It rises by up to 12.5% if a block exceeds the target. It falls by up to 12.5% if underfilled. Users calculate their total Base Fee as the current rate times their transaction's gas limit and usage.

Users add a separate priority fee, or tip, atop the Base Fee. Validators receive only tips. The Base Fee goes to burning. This splits fees into predictable base and variable tip components.

The Base Fee matters for fee predictability. Unlike prior auctions, it avoids price volatility spikes. Burning fosters deflation, as over 4 million ETH burned since launch. It deters spam attacks by raising costs during congestion. Users plan transactions better, improving Ethereum's usability and economic model.

Key characteristics:

• Dynamic: Adjusts per block congestion
• Burned: Deflationary mechanism
• EIP-1559 specific: Active on Ethereum mainnet
• Example: At 20 gwei Base Fee, a 21,000 gas transfer costs 0.00042 ETH in Base Fee