# Yinhong William Zhao et al. - EIP-1559 in Retrospect (Highlights) ![rw-book-cover|256](https://readwise-assets.s3.amazonaws.com/static/images/article0.00998d930354.png) ## Metadata **Cover**:: https://readwise-assets.s3.amazonaws.com/static/images/article0.00998d930354.png **Source**:: #from/readwise **Zettel**:: #zettel/fleeting **Status**:: #x **Authors**:: [[Yinhong William Zhao]], [[Kartik Nayak]] **Full Title**:: EIP-1559 in Retrospect **Category**:: #articles #readwise/articles **Category Icon**:: 📰 **URL**:: [decentralizedthoughts.github.io](https://decentralizedthoughts.github.io/2022-03-10-eip1559/) **Host**:: [[decentralizedthoughts.github.io]] **Highlighted**:: [[2022-03-12]] **Created**:: [[2022-09-26]] ## Highlights ### Transaction Fee Mechanism - However, first-price auction may require users to either overpay transaction fees or have a long waiting time. In particular, in periods of high demand, transaction fees can be volatile due to which it is difficult for users to make the right bid. ([View Highlight](https://instapaper.com/read/1489999776/19016240)) ### What is EIP-1559? - First, EIP-1559 changes the requirement from fixed-sized blocks to variable-sized blocks. ([View Highlight](https://instapaper.com/read/1489999776/19016245)) - Second, EIP-1559 introduces a base fee parameter determined by network conditions. Base fee is the minimum gas price that every transaction must pay, to be included in a block. If the block gas used in a block is greater than the target, the base fee for the next block increases, and vice versa. ([View Highlight](https://instapaper.com/read/1489999776/19016247)) - Third, the way users bid is modified in a backward-compatible manner. In addition to the required base fee, users can optionally bid two parameters in their transactions, max priority fee per gas (“tip”) and max fee per gas (“cap”). Priority fees per gas are the tips with which users incentivize miners to prioritize their transactions. Max fees are the fee caps users will pay including both base fees and priority fees. ([View Highlight](https://instapaper.com/read/1489999776/19016248)) - Finally, the base fee is burned, while the priority fee is rewarded to the miners. ([View Highlight](https://instapaper.com/read/1489999776/19016249)) ### Our Findings - We observe that EIP-1559 did not lower the transaction fee level itself in our data period, but it enabled easier fee estimation for users. High gas fee is a scalability issue, not a mechanism design issue. ([View Highlight](https://instapaper.com/read/1489999776/19016252))