What is eip-1559 and how does it work?

Not only will users have a smoother experience sending ETH or interacting with smart contracts, but investors in the cryptocurrency are also excited by EIP-1559. The base fee for all transactions is paid in ETH and they will be ‘ burned ’ - meaning that these coins will be permanently removed from the circulating supply.

Why is 1559 a good investment?

Essentially, 1559 will eliminate the risk of ether being displaced and losing its monetary premium. The second benefit is the one that receives all the attention. If the Base Fee is high enough that the total amount of ETH burned in each block is greater than the block subsidy, then ether will become a deflationary asset.

What is eip-1559 fee model?

EIP-1559 fee model allows users to specify the highest fee they are ok to pay for a transaction (Max Fee) but doesn’t charge them that amount if the transaction can be processed at the lower price.

What happens after eip-1559?

After EIP-1559 the Base Fee takes care of congestion volatility and a user only needs to signal the urgency of the transaction by setting the Priority Fee. It’s usually just 1-3 GWEI if you are not fighting in the gas war. Users no longer have to monitor gas prices estimations in order to submit a transaction.