Seeing today’s topic, does it feel a bit familiar? OK, I admit it — this is another series of educational content following the “Bridge Series”: the “Fee Series.” After all, in blockchain networks, transaction fees have always been one of the topics users care about most.
Many people have experienced this: sometimes transaction fees are very low, but at other times they suddenly surge, and even a simple transaction can become costly. In order to make the fee mechanism more stable and predictable, the blockchain industry gradually introduced an important design — Base Fee.
Simply put, Base Fee is a basic transaction fee automatically calculated by the network. It is not arbitrarily set by users, but dynamically adjusted according to the current level of network congestion.
The most well-known implementation of this mechanism comes from Ethereum’s fee model introduced after the EIP-1559 upgrade. Under this model, transaction fees are divided into two parts:
Base Fee
Priority Fee
Together, these two components form the total transaction cost paid by the user. In the next lesson, we will explain Priority Fee in detail. In this lesson, we will continue focusing on Base Fee.
You can think of Base Fee as the “minimum ticket price” required to enter the blockchain network. However, this ticket price is not fixed:
When the network becomes very congested, the ticket price increases.
When the network is relatively idle, it automatically decreases.
The core goal of this mechanism is to make transaction fees more transparent and reduce the chaotic bidding competition between users that previously caused extreme fee volatility.
Base Fee Was Introduced to Prevent Unlimited Bidding
In early blockchain networks, users typically had to set their own Gas Price.
If the Gas Price was set too low, the transaction might remain unconfirmed for a long time.
If it was set too high, the user might end up paying unnecessary costs.
This mechanism had a clear problem: fees were entirely determined by competition among users, which often resulted in dramatic fluctuations.
This was especially obvious during popular on-chain events such as:
Popular NFT minting events
New DeFi protocol launches
Sharp market volatility
Increased on-chain liquidations
When a large number of transactions flooded the network simultaneously, users would continuously increase fees to compete for block space. As a result, Gas fees could skyrocket within a short time.
The introduction of Base Fee was essentially designed to improve this situation.
By allowing the system to automatically calculate the base transaction cost, the network can dynamically adjust pricing based on block congestion, rather than relying entirely on bidding competition between users.
Base Fee Changes Are Directly Linked to Block Utilization
Blockchain systems typically define a target block capacity.
When block usage exceeds the target, it indicates rising demand, and the Base Fee increases. When block usage falls below the target, it indicates declining demand, and the Base Fee decreases.
In other words:
The more congested the network → the higher the Base Fee
The more idle the network → the lower the Base Fee
This mechanism works like an automatic adjustment system, gradually guiding fees back to a reasonable range instead of allowing extreme fluctuations.
A Key Benefit: Transaction Fees Become More Predictable
From the user’s perspective, this mechanism introduces a major improvement — transaction fees become easier to estimate.
Users no longer need to constantly guess the correct Gas price. Instead, they only need to add a small priority fee on top of the Base Fee to significantly increase the chance of their transaction being included quickly.
Looking deeper, this mechanism essentially creates a dynamic pricing curve for blockchain networks.
In the past, transaction fees resembled an auction market: users competed by offering higher prices to gain priority inclusion in blocks.
Under the Base Fee model, the system behaves more like an automatic pricing mechanism, adjusting the base price according to real-time demand and maintaining relative market stability.
Gradual Fee Changes Instead of Sudden Spikes
Another important change is that fee increases no longer happen instantly.
The Base Fee can only change by a limited percentage per block. This means that even if the network suddenly becomes highly congested, fees will rise gradually instead of doubling within a short time.
This design significantly reduces fee shocks during extreme market conditions and gives users and applications more time to adjust.
For wallets, trading platforms, and DeFi applications, this is extremely important. When fee changes become smoother, systems can estimate transaction costs more accurately and increase the success rate of transactions.
For example, wallets can automatically recommend appropriate fees, allowing users to complete transactions successfully without deeply understanding the Gas mechanism.
Base Fee Also Influences On-chain Transaction Behavior
The Base Fee mechanism also affects overall transaction activity on the network.
When network fees increase, some non-urgent transactions will be delayed, helping relieve congestion. When fees decrease, more transactions re-enter the network.
To some extent, this represents a market self-regulation process.
Therefore, Base Fee is not just a parameter for transaction costs. It actually coordinates three key aspects:
Allocation of network resources
User transaction experience
Efficiency of the on-chain economic system
From User Bidding to System Pricing
In the traditional fee model:
Everyone competed by offering higher fees. Miners selected the highest-paying transactions first
Under the Base Fee model:
The network first determines a base price. Users only need to add a small incentive fee, and validators will prioritize processing the transaction. This approach reduces meaningless fee competition and lowers uncertainty in transaction costs.
There is also another very important design feature.
In many implementations, the Base Fee is not paid to miners or validators — it is burned.
This creates a new economic effect: when network usage increases, tokens are continuously burned, which can influence the overall token supply structure.
Base Fee as an Economic Model
From a deeper perspective, Base Fee solves a classic problem:
How to fairly allocate limited resources.
Block space on a blockchain is limited, while user demand constantly fluctuates. Base Fee effectively assigns a dynamic price to this scarce resource, allowing the market to function more smoothly.
Therefore, Base Fee is not simply a transaction fee mechanism — it is an important component of the blockchain economic system.
This is why many people believe Base Fee is both a fee mechanism and an economic model design.
Conclusion
If we summarize Base Fee in one sentence:
It is a network-adjusted base transaction fee designed to stabilize the fee market and optimize block space allocation.
As the blockchain ecosystem continues to evolve, fee mechanisms are also constantly improving. From early simple bidding models to the Fee Market and now to dynamic systems like Base Fee, the industry is gradually moving toward more mature economic structures.
Understanding these mechanisms helps us realize an important truth:
Blockchain is not just a technical system — it is also a market system running on code.
