The base fee and the priority fee are the two parts of the network feeNetwork feeA fee paid to a crypto network, not to a bank or company, for including your transaction in a block. on EthereumEthereumAn open blockchain that can run applications and smart contracts, with its own cryptocurrency called ether (ETH).. The network itself sets the base fee according to demand, and it is destroyed. The priority fee, often called a tip, is added by you and goes to the ValidatorValidatorA participant on a proof-of-stake network who locks up their own crypto as a stake to create and check blocks in return for rewards. who includes the transaction in a block. The system arrived with the London upgrade in August 2021 and is named after the proposal behind it, EIP-1559.
How is the base fee set?
Each block on Ethereum has a target for how much GasGasThe unit that measures the computing work a transaction or smart contract needs on Ethereum, which sets how high the network fee is. it uses. If a block goes over the target, the base fee rises in the next block, by up to 12.5%. If it comes in under, the fee falls. The base fee therefore follows demand automatically, and everyone in the same block pays the same amount.
The base fee is burnedToken burnWhen tokens or coins are permanently removed from circulation, usually by sending them to an address nobody holds the key to., meaning permanently removed from circulation. When the network is busy, more ether can be burned than is created as rewards, and the supply shrinks.
What is the priority fee for?
The priority fee gives validators a reason to pick your transaction. Usually a small one is enough. When many people are competing for space, for example during sharp price moves, it pays to offer more to get in sooner.
When you send a transaction, your wallet also sets a maximum fee. If the base fee is lower than the maximum when the transaction goes through, you get the difference back. You never pay more than the maximum.
What about other networks?
Some networks use a similar system. On Solana there is a base fee per signature, and you can add a priority fee. Bitcoin, on the other hand, has no base fee. Users simply bid for space in the next block, and miners pick the transactions that pay the most.
Most wallets work out the fees automatically. If a transaction is stuck in the MempoolMempoolThe holding area where unconfirmed transactions wait to get into a block; every node on the network keeps its own., it is usually because the fee was too low for how busy the network was.
Everything in Myntkaup Learn is written and regularly reviewed by the Myntkaup editorial team. It is for education and is not investment advice. Editorial policy. Updated 2 November 2026.