The accurate pricing of transaction fees has always been a problem of the ethereum blockchain.

There are fees attached to every transaction, and miners have always had to prioritize transactions with higher fees to boost their gain. Therefore, the higher the transaction fee, the higher the chance of getting your transaction into the next block.

That is called the First Price Auction Model and experts have been clamouring against it for its inaccuracy as traders are spending more than what should be the usual fees.

This is the problem that EIP-1559 is solving in the blockchain. It’s a better pricing model to accurately determine transaction fees. According to the FAQ released on the Ethereum website, there are now two distinct fees: inclusion fees and base fees.

The base fees are block-fixed for any type of transaction. The base fees will either increase or decrease depending on the gas target limit.

At relevant intervals, the base fees are going to be burnt. This is necessary to ensure deflation of Ethereum. By far, this mechanism is quite fair.