Ethereum transaction fees—commonly known as "gas fees"—are an essential part of using the network. Whether you're sending ETH, swapping tokens, or minting an NFT, you’ll need to pay gas to have your transaction confirmed. With the introduction of EIP-1559, the way users interact with gas fees has fundamentally changed, offering greater predictability and potential cost savings.
This comprehensive guide walks you through everything you need to know about EIP-1559, how gas fees are calculated, and how to set them effectively in any Ethereum-compatible wallet.
Understanding Ethereum Gas Fees
Every action on the Ethereum blockchain requires computational resources. To compensate validators (formerly miners) for securing the network, users must pay a transaction fee—commonly referred to as gas.
Gas is measured in units, and each unit has a price denominated in gwei (1 gwei = 0.000000001 ETH). The total fee depends on two factors:
- Gas limit: The maximum amount of gas you're willing to spend.
- Gas price: How much you're willing to pay per unit of gas.
Before EIP-1559, users had to manually estimate both values, often leading to overpayment or delayed transactions during network congestion.
👉 Discover how smart fee optimization can reduce your blockchain costs today.
What Is EIP-1559?
EIP-1559 is a major Ethereum improvement proposal that overhauled the transaction fee mechanism. Implemented in August 2021, it introduced a more transparent and efficient system by splitting the gas fee into two components:
- Base Fee: A dynamically adjusted base cost per unit of gas, determined algorithmically by network demand.
- Priority Fee (Tip): An optional tip paid directly to validators to incentivize faster inclusion of your transaction.
The key innovation? The base fee is burned, meaning it’s permanently removed from circulation, making ETH more deflationary over time.
This shift reduces price volatility in gas markets and allows wallets to provide accurate fee estimates—making transactions easier for everyday users.
How Are Gas Fees Calculated Under EIP-1559?
To understand how much you’ll pay, let’s break down the core concepts:
- Gas: The unit measuring computational effort required for a transaction.
- Base Fee: Automatically updated with each block based on network congestion. High demand increases the base fee; low demand decreases it.
- Priority Fee (Tip): A small additional amount you offer to validators for faster processing.
- Max Priority Fee: The highest tip you’re willing to pay per unit of gas.
- Max Fee: The total maximum you’re willing to pay per unit of gas (must be ≥ Base Fee + Max Priority Fee).
Formula:
Total Transaction Cost = Gas Used × (Base Fee + Priority Fee)
Think of it like driving a car:
- Gas = gallons of fuel used
- Base Fee = standard fuel price per gallon
- Priority Fee = tip to the tollbooth operator for express lane access
- Max Fee = your total budget per gallon
If the actual cost is lower than your max, you only pay what’s needed—the rest is refunded automatically.
How to Set Gas Fees in Your Wallet
Most modern wallets, including imToken and others, support EIP-1559 and offer two ways to configure fees:
1. Preset Fee Tiers (Recommended for Most Users)
When initiating a transaction, you’ll typically see three options:
| Tier | Confirmation Time | Fee Level |
|---|---|---|
| Fast | < 30 seconds | Highest fee |
| Standard | ~2 minutes | Moderate fee |
| Slow | ~10+ minutes | Lowest fee |
These tiers reflect real-time network conditions. The wallet automatically calculates appropriate Max Fee and Max Priority Fee values based on current base fee and expected congestion.
This method is ideal for users who want simplicity without diving into technical details.
2. Custom Fee Settings (For Advanced Users)
For greater control, you can manually adjust:
- Max Fee
- Max Priority Fee
- Gas Limit
Tips for Custom Configuration:
- Always ensure:
Max Fee ≥ Base Fee + Max Priority Fee - Increase the priority fee if you need faster confirmation.
- Do not lower the gas limit below the required threshold—this may cause transaction failure and loss of fees.
- Use block explorers like Etherscan to check historical gas usage for similar transactions (e.g., NFT mints or token swaps).
For example, minting an NFT on OpenSea typically uses around 210,000 gas. Setting your gas limit below this risks failure—even though you still pay the full base fee.
⚠️ Note: The base fee cannot be edited—it’s set by the protocol.
👉 Learn how advanced users optimize transaction timing and fees across networks.
Frequently Asked Questions (FAQ)
Q: Does EIP-1559 actually save me money?
Yes, in many cases. Because the base fee is predictable and automatically adjusted, overbidding is minimized. You also benefit from refunds when your max fee exceeds the actual cost.
Q: Why did my transaction fail even after paying gas?
A transaction can fail due to insufficient gas limit, even if fees were paid. Failed transactions still consume gas because computational resources were used. Always verify required gas for complex actions like smart contract interactions.
Q: Can I get a refund if my transaction fails?
No. Once gas is consumed during execution—even if the transaction reverts—you cannot recover it. This is why setting accurate gas limits is crucial.
Q: Is the priority fee mandatory?
No, but including a small tip (e.g., 1–3 gwei) significantly improves confirmation speed, especially during peak times.
Q: What happens to the base fee?
It’s burned—permanently removed from circulation. This deflationary mechanism can contribute to ETH’s long-term value accrual.
Q: How do I check current base fees?
Use tools like Etherscan, GasNow, or your wallet’s built-in gas estimator. These display real-time base fees and recommended tips.
Best Practices for Managing Gas Fees
- Use Preset Tiers Unless Necessary
Most users don’t need custom settings. Let your wallet handle optimization. - Monitor Network Congestion
Avoid peak hours (e.g., major NFT drops or DeFi launches) when base fees spike. - Leverage Layer 2 Solutions
Consider using scaling solutions like Arbitrum, Optimism, or zkSync for cheaper and faster transactions. - Plan High-Value Transactions Carefully
For large transfers or contract executions, double-check gas estimates and allow buffer room. - Stay Informed About Upgrades
Ethereum continues evolving with improvements like proto-danksharding and further fee optimizations on the roadmap.
Final Thoughts
EIP-1559 revolutionized Ethereum’s user experience by bringing transparency and efficiency to gas pricing. No longer do users need to guess or overpay—smart defaults and burn mechanics work together to create a fairer system.
Whether you're a casual user or an experienced DeFi participant, understanding how EIP-1559 works empowers you to make informed decisions and avoid unnecessary costs.