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Research · Ethereum

Gas and gas fees

Gas measures work; the fee is what that work costs. EIP-1559 split the fee into a base fee the protocol sets and a priority fee the user offers, and made the base fee burn rather than pay the block producer.

Last reviewed 2026-09-21Source: EIP-1559 and ethereum.org gas documentationMechanism descriptions only; no fee levels or savings figures are claimed.

Gas as a unit of work

Every operation the EVM performs has a gas price attached to it by the protocol. Adding two numbers costs a small fixed amount; writing a storage slot costs far more; expanding memory costs an amount that grows quadratically with the size requested. A transaction's gas usage is the sum of those charges across every operation it executes, including the operations executed by any contract it calls.

Gas is not ether. It is a dimensionless count of work, and the protocol fixes how much of it each operation consumes. That separation is what allows the cost of computation to be repriced without changing what a contract does: a hard fork can raise the gas cost of an opcode that turned out to be underpriced, and the contract still behaves identically, it simply costs more gas to run. The user's bill is gas multiplied by the price of gas, and only the second of those is set by the market.

A transaction carries a gas limit as well as a gas price. The limit is the maximum the sender is willing to let the transaction consume, and it exists because a node cannot know in advance how much work a call will do. If execution exhausts the limit, the transaction reverts and the gas is still spent — the work was done, so it is paid for, even though no state change survives. Setting the limit too low is therefore a way to pay for a transaction that does nothing.

The EIP-1559 fee market

Before EIP-1559, a transaction named a single gas price and block producers included the transactions that paid the most, which made fee estimation a guessing game: a user had to bid against other users for space in the next block, and overpaying was the only reliable way to be included. EIP-1559 replaced that first-price auction with a two-part fee and a protocol-controlled base fee.

The base fee is calculated by the protocol from how full the previous block was relative to a target size. When blocks are fuller than the target the base fee rises; when they are emptier it falls. The adjustment is bounded per block, so the fee moves toward equilibrium over several blocks rather than jumping. Because the base fee is computed from the chain rather than chosen by the sender, every transaction in a block pays the same base fee, and a wallet can predict it from the previous block.

The second component is the priority fee, sometimes called the tip. It is the amount the sender offers to the block producer on top of the base fee, and it is what a transaction uses to compete for inclusion when the base fee alone does not clear the market. A transaction specifies a maximum fee per gas and a maximum priority fee per gas; the effective fee is the base fee plus the priority fee, capped by the maximum. If the base fee rises above the maximum, the transaction is not includable until it falls or the sender replaces it.

The change that matters most for the supply of ether is what happens to the base fee. It is burned — removed from circulation — rather than paid to the block producer. The producer receives only the priority fee. That is why Ethereum's issuance and its burn are discussed together: the protocol issues new ether to validators and destroys ether through the base fee, and the net change in supply depends on the balance between the two.

What a sender actually controls

The fee fields a transaction carries under EIP-1559 and what each one determines.
FieldSet byWhat it determines
Base fee per gasThe protocol, from the previous blockThe floor every transaction in the block pays; burned, not paid to the producer
Max priority fee per gasThe senderThe most the sender will pay the block producer on top of the base fee
Max fee per gasThe senderThe ceiling on the total fee; the transaction waits if the base fee exceeds it
Gas limitThe senderThe most work the transaction may consume before it reverts

Last reviewed 2026-09-21Source: EIP-1559, SpecificationField semantics as specified; wallet defaults are a separate matter.

In practice a wallet fills in the base fee from the latest block, estimates a priority fee from recent blocks, and sets the maximum fee as a multiple of the current base fee to allow for movement. The sender's real choice is the priority fee, and it is a choice about latency rather than about price: a higher tip buys inclusion sooner, and a lower tip waits. Because the base fee is burned either way, a higher tip does not raise the amount destroyed.

The mechanism has limits worth stating. It smooths the fee across blocks and removes the guesswork from the base component, but it does not make block space abundant: when demand persistently exceeds the target, the base fee rises until enough demand is priced out. It also does not eliminate priority-fee competition during congestion, when the tip becomes the deciding factor for inclusion. And because the base fee is burned, a period of high demand reduces ether supply rather than transferring the fee to producers — a deliberate design choice with consequences that belong to the monetary discussion rather than to the fee mechanism itself.

Sources and references

The fee mechanism described above is specified in EIP-1559 and documented for users and developers by ethereum.org.

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