Recent Updates to Ethereum: The EIP‑1559 Upgrade

Lately, Ethereum’s upgrade has attracted a lot of attention, akin to a system update for Apple or Android devices. This upgrade is known as the Ethereum Improvement Protocol EIP‑1559. As many are aware, one of the major scaling bottlenecks for Ethereum is network congestion. With the explosion of decentralized applications, the upgrade has become urgent. Below, the editorial team walks you through the details of EIP‑1559 in a single article.

EIP‑1559 is the fee mechanism introduced in Ethereum’s London hard fork. It aims to alleviate network congestion through a burned base fee and elastic block sizes, while using tips to incentivize miners (or validators) to include transactions.

Our Bitaigen editorial team has carefully distilled the core mechanics and underlying logic of EIP‑1559, helping readers quickly grasp the key points of Ethereum’s fee reform and understand its far‑reaching impact on network congestion and miner incentives. The following sections unpack each component in depth, so a thorough read is recommended.

What Is the Ethereum EIP‑1559 Protocol?

EIP stands for *Ethereum Improvement Proposal*. EIP‑1559 was proposed by Vitalik Buterin in 2019. In a series of tweets, he noted that transaction‑fee revenue for miners had approached roughly half of the block reward, potentially jeopardizing network security, and he suggested a reform of the fee market to address the issue.

Key Mechanisms

• base fee: a fixed portion of the fee for each block that is burned (destroyed) after the transaction is processed; miners cannot claim it.
• elastic block size: the block capacity can expand or shrink dynamically according to network congestion, allowing more or fewer transactions per block.
• gas target: the protocol calculates the upper and lower bounds of the base fee based on the actual gas used in the previous block versus a target gas amount (the original gas limit).
• tip: users may add an optional tip to motivate miners (or validators) to prioritize their transaction.

When the gas used in a block exceeds the target, the base fee rises; when it falls below the target, the base fee drops. During the early phase of the upgrade, a transitional scheme was employed: half of the blocks continued to use the legacy auction model, while the other half adopted the new fee model, with a gradual full migration thereafter. After the transition, miner revenue comes mainly from the block reward and tips, while the base fee is permanently burned.

Four Core Points of the Protocol

1. Unified fee rate – aim to have all transactions pay roughly the same rate, improving user experience.
2. Elastic block limit – enable a scalable block size that balances space utilization.
3. Permanent fee burning – destroy the base fee to provide long‑term incentives for the network and boost security.
4. Mandatory ETH consumption – require each transaction to consume a specific amount of ETH, raising the economic “stickiness” of the protocol.

Development Timeline of EIP‑1559

• In early 2020, ConsenSys’s Protocol team joined the effort, conducting research across implementation, simulation, formal analysis, and community outreach.
• Ethereum’s mainnet completed the London hard fork at block height 12,965,000, at which point EIP‑1559 went live. After the upgrade, the network began dynamically adjusting the base fee for each transaction according to demand and block size, and the fee is burned. Data shows that within the first 13 hours, roughly 3,300 ETH were burned.
• The new fee structure reduced the portion of fees that miners receive, providing an additional economic foundation for the transition from Proof‑of‑Work (PoW) to Proof‑of‑Stake (PoS).

Hard forks are a common method for blockchain evolution. Although they introduce a degree of tension with the immutable nature of the ledger, upgrades decided through community voting still respect decentralization principles, allowing the technology to keep advancing.

Three Major Problems Addressed by EIP‑1559

1. Higher throughput – block size can double, accommodating more and faster transactions.
2. Transparent fee schedule – users receive predictable fee information, reducing cost volatility.
3. ETH deflation – a small amount of ETH is burned with every transaction, nudging Ethereum toward a deflationary asset model.

Through these mechanisms, EIP‑1559 injects fresh momentum into Ethereum’s scalability, security, and economic model. For more in‑depth coverage of EIP‑1559, stay tuned to future Bitaigen (比特根) articles.

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Related Reading

• Ethereum: From PoW to PoS – Ethash, Casper & Migration
• Understanding Ethereum Gas Fees: How They’re Calculated & Saved
• Blockchain Gas Fees Explained: How They Work & Why It Matters

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