Gas Fees

# Gas Fees

Every time you do something on Ethereum, you pay gas. People treat gas as an annoying tax, but it is really a pricing mechanism for a shared, congested computer that everyone on Earth can submit jobs to at once. Without a price, that computer would be trivially easy to spam into uselessness.

## Gas is work, not money

Gas measures computational effort, not value. Each operation the Ethereum Virtual Machine can perform has a fixed gas cost: a simple addition is cheap, writing a new value to storage is expensive, because storage burdens every node forever. A plain transfer of ether costs 21,000 gas. A complex DeFi interaction might cost several hundred thousand.

The fee you actually pay is **gas used multiplied by gas price**. Gas used depends on what your transaction does. Gas price depends on how much you are willing to bid for block space.

## Before and after EIP-1559

The original model was a blind auction. You guessed a gas price, and miners picked the highest bidders. Users routinely overpaid or got stuck. EIP-1559 restructured this.

| Aspect | Legacy auction | EIP-1559 |
|--------|----------------|----------|
| Price discovery | Blind first-price bid | Protocol-set base fee |
| Base fee | None | Adjusts per block with demand |
| Fee to validator | Whole gas price | Only the priority tip |
| Base fee outcome | Paid to miner | Burned (removed from supply) |
| User experience | Frequent overpayment | More predictable estimates |

Under EIP-1559 your total fee splits into a **base fee** and a **priority fee** (the tip). The base fee is computed by the protocol from how full recent blocks were: if blocks run above the target size, the base fee rises; below target, it falls. Crucially, the base fee is burned rather than paid to the validator. The tip is the only part validators keep, so it is what actually prioritizes your transaction.

## Why fees spike

Block space is fixed per unit time. When demand surges, an NFT mint, a liquidation cascade, an airdrop claim, the base fee climbs block by block until enough people drop out. This is congestion pricing, the same idea as surge pricing for rides or peak tolls on a bridge.

## Where the fee actually goes on Layer 2

Most users today transact on rollups, not on Ethereum directly, and the fee structure changes shape there. A rollup transaction has two cost components. The first is execution on the rollup itself, which is cheap because the rollup runs its own sequencer. The second, and usually larger, is the cost of publishing the compressed transaction data back to Ethereum so the rollup inherits its security. That data-availability cost is why rollup fees still move with Ethereum congestion even though execution is offloaded. The EIP-4844 "blob" mechanism added a separate, cheaper data lane specifically to lower this second component, which is the main reason rollup fees dropped sharply after it shipped.

## The takeaway

Gas is not arbitrary. It is the market clearing price for a scarce global resource. Understanding the split between base fee and tip, and on Layer 2 the split between execution and data publishing, is the difference between guessing and actually controlling what you pay.

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