EIP-1559 is the Ethereum transaction-fee mechanism, live since the London upgrade of August 2021, that replaced the old first-price gas auction with a protocol-computed base fee — the same price per unit of gas for every transaction in a block, and it is burned rather than paid to anyone — plus an optional priority fee (the tip) that does go to the validator. You set a max fee as your ceiling; you are charged base fee plus tip, and the unused difference is refunded. It made fees predictable, not cheap: the base fee still climbs by up to 12.5% per block for as long as blocks run above their gas target. WATS is a non-custodial wallet built on top of this model — its Hot Wallet uses an ERC-4337 paymaster to settle the base fee and tip in ETH on-chain, burned exactly as the protocol requires, while charging you in a single token, ATS.
Gas before EIP-1559: the blind auction
Until 2021, Ethereum priced gas with a first-price auction: every transaction named its own gas price, miners took the highest bidders, and everyone else guessed. The result was systematic overpaying — you bid high to be safe, and there was no protocol-level signal of what a "fair" price was at any moment. Fee estimation was folklore. EIP-1559, shipped in the London upgrade in August 2021, replaced that auction with an algorithmic price plus a small tip — and, famously, set the main fee on fire.
What EIP-1559 changed
The redesign has three parts. Each block now carries a base fee — a per-gas price computed by the protocol itself, identical for every transaction in the block. Blocks became elastic: they target a set amount of gas but can stretch to roughly double under load, giving the network a pressure valve. And the base fee is burned — destroyed outright rather than paid to the validator. What the validator receives is only the optional priority fee (the tip) you add on top.
The base fee: set by protocol, burned by design
The base fee adjusts mechanically, block by block: if the previous block was more than half full, it rises (by up to 12.5%); if less than half full, it falls. Sustained demand therefore compounds the price upward until demand relents — no auctions, no guessing, just a thermostat. Burning it serves two purposes. Economically, it removes the incentive for block producers to manipulate or game a fee they would otherwise collect. And monetarily, it ties ETH's supply to usage: every transaction destroys a little ETH, the canonical example of the fee-sink model covered in the token burn explainer.
What you actually configure: tip and max fee
A modern Ethereum transaction sets two numbers. The priority fee is the tip per unit of gas that goes to the validator — the nudge that gets you included promptly when blocks are contested. The max fee is your ceiling: the most per gas you are willing to pay in total. At execution you pay base fee plus tip, never more than your ceiling, and the unused difference is refunded. If the base fee climbs above your max fee before inclusion, the transaction simply waits — which is why a transaction can sit "pending" through a demand spike and confirm on its own once fees cool off.
Did EIP-1559 make gas cheaper?
No — and it never promised to. Fees are still set by demand for block space; a popular mint will still price people out. What changed is predictability: the protocol now publishes the current price instead of making you bid blind, chronic overpayment is largely gone, and refunds of the unused max fee are automatic. Think of it as replacing a haggling bazaar with a posted price that moves. The posted price can still be painful; at least you can read it.
Beyond mainnet: L2s and the modern fee stack
EIP-1559's design proved durable enough that most major L2s adopted the same base-fee mechanism for their own execution gas. An L2 transaction's real cost, though, has a second component: publishing data back to Ethereum, which since the introduction of blob transactions in 2024 has its own separate fee market with its own 1559-style adjustment. "Gas" on an EVM chain today is really a small stack of these markets — a detail wallets increasingly hide, as covered in crypto gas fees explained.
Where WATS fits
EIP-1559 made gas legible, but it did not change which asset you must hold to pay it — you still need each chain's native coin. That is the half of the problem WATS removes. In the WATS Hot Wallet every action — transfers, swaps, staking — is charged in one token, ATS, instead of the chain's native gas. On EVM chains an ERC-4337 paymaster settles the real base fee and priority tip in ETH on your behalf, so the burn happens exactly as the protocol requires — the pattern set out in gas abstraction. ATS itself moves across networks as a LayerZero OFT, so one balance covers fees on Ethereum, Arbitrum, Optimism, Base, Polygon, BNB Chain, Solana and TON.
Two things this is not. It is not a discount: the ATS you spend tracks the live network cost, so it changes which token pays, not what the network charges. And it is not a custody trade-off — WATS is fully non-custodial across its Chrome Extension, Mobile App, Hot Wallet and NFC Metal Card; you hold the keys and WATS never holds one. Collected ATS is burned, taking supply from 100M down to a 30M floor, which is the same fee-sink logic Ethereum applies to its own base fee. WATS is the first and only wallet to combine ERC-4337 single-token fees with LayerZero OFT and that burn.
So if the recurring annoyance in your week is keeping a dust balance of ETH, BNB and SOL alive purely so you can transact, the practical step that follows from all of the above is to run a wallet that abstracts the payment asset — for example WATS, with ATS as the single fee token. The base fee still gets burned in ETH, exactly as EIP-1559 specifies; you just stop shopping for the coin that triggers it.
Frequently asked questions
What happens to the burned base fee in Ethereum?
It is destroyed — removed from ETH's supply permanently. The base fee is not paid to validators; they receive only the priority tip. Burning it removes the incentive for block producers to game the fee mechanism and ties ETH's monetary supply to network usage: the busier Ethereum is, the more ETH is burned.
Why is my transaction pending even though I set a max fee?
Most likely the base fee rose above your max fee, or your priority tip is too low for current competition. A transaction whose ceiling is below the going rate is not rejected — it waits in the mempool and will confirm by itself if the base fee falls back under your ceiling. You can also usually replace it with the same nonce and a higher max fee to confirm sooner.
Can I use an EIP-1559 chain without holding ETH for gas?
WATS is one way to do this: the WATS Hot Wallet charges every action in a single token, ATS, while on EVM chains an ERC-4337 paymaster settles the actual base fee and priority tip in the native coin on-chain — ETH on Ethereum — so the base fee is still burned exactly as the protocol requires. At the protocol level the chain's own native coin always pays; account abstraction only changes who fronts it and what you are charged. Because ATS moves as a LayerZero OFT, the same balance covers fees on Ethereum, Arbitrum, Optimism, Base, Polygon, BNB Chain, Solana and TON, and WATS remains non-custodial — you hold your keys, WATS never holds one.
If I pay fees in another token, does that bypass EIP-1559?
No. On Ethereum the protocol always collects the base fee and tip in ETH, and the base fee is always burned. What token-denominated fee models change is who fronts that ETH: with an ERC-4337 paymaster, the paymaster pays the native gas and charges you in a token instead. In WATS that token is ATS, used as one fee asset across every supported chain, with collected ATS burned from a 100M supply toward a 30M floor. It is a change of payment asset, not a discount on the network's price.