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EIP-1559 and the London Hard Fork (August 2021)

Block 12,965,000 introduced the base fee burn.

Activation

The London hard fork activated at block 12,965,000 on August 5, 2021. Its core change, EIP-1559, replaced first-price gas auctions with a protocol-set base fee plus an optional priority tip.

The base fee algorithm

Each block targets 15 million gas with a 30 million maximum. If a block is full, the next base fee rises by 12.5 percent; if empty, it falls by 12.5 percent. Users set a max fee and a max priority fee, and pay base fee plus tip, refunded down to their cap.

Burning the base fee

The base fee is destroyed rather than paid to miners. Within the first month more than 200,000 ETH was burned, and the cumulative burn passed 1 million ETH by November 2021, with NFT mints and OpenSea among the largest burners.

Ultrasound money

When burn exceeds issuance, ETH supply contracts. After the Merge cut issuance to roughly 1,700 ETH per day, supply fell during busy periods in 2022 and 2023, but Dencun's cheap blobs in 2024 lowered burn and made supply inflationary again.

Fee calculation

A transfer using 21,000 gas at a 20 gwei base fee and 1 gwei tip costs 21,000 × 21 × 10^-9 = 0.000441 ETH. At $3,000 per ETH that is about $1.32, of which $1.26 is burned.

By the numbers

For EIP-1559 and the London Hard Fork, the reference figures are date of August 5, 2021, block of 12,965,000, mechanism of Base fee burned, tip to producer, target gas of 50% full blocks. The comparison table below lines up item, value — Activation block: 12,965,000; Target gas: 15M; Max gas: 30M; Max base fee change: ±12.5% per block; Cumulative burn passing 1M ETH: Nov 2021.

Modeling EIP-1559 and the London Hard Fork with the Ethereum EIP1559 Gwei To USD Calculator

The Ethereum EIP1559 Gwei To USD Calculator takes three inputs — Gas used, Base+tip (gwei), ETH price ($). Fee = gas × gwei × 1e-9 × ETH price. With its default inputs (Gas used = 21000; Base+tip (gwei) = 20; ETH price ($) = 3000) it returns 1.26 $; swap in the figures from EIP-1559 and the London Hard Fork above to reproduce the scenario yourself.

Modeling EIP-1559 and the London Hard Fork with the Token Burn Deflation Calculator

The Token Burn Deflation Calculator takes three inputs — Supply (M), Annual burn (M), Annual issuance (M). Net supply change = (issuance − burn) ÷ supply. With its default inputs (Supply (M) = 1000; Annual burn (M) = 30; Annual issuance (M) = 10) it returns -2 %; swap in the figures from EIP-1559 and the London Hard Fork above to reproduce the scenario yourself.

Data Table

For educational and informational purposes only. Not financial, investment, tax or legal advice. Figures are approximate and historical; crypto assets are volatile and you may lose capital. Do your own research.