> For the complete documentation index, see [llms.txt](https://docs.novarpc.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.novarpc.xyz/nova-rpc/why-use-a-private-mempool/understanding-mev/fee-markets.md). # Fee Markets With the goal of further improving the user experience, Ethereum's fee market was overhauled with the [EIP-1559 upgrade](https://eips.ethereum.org/EIPS/eip-1559), replacing the first price auction system (highest bidder wins) with a system that encompasses the following: * **Base fee:** Algorithmically determined by the protocol itself, base fees represent the minimum fee for your transaction to be considered valid, and are burned upon inclusion. * **Priority Fee (Tip):** Users can optionally add a tip to incentivize validators to prioritize their transactions. This is especially relevant when the network is busy since block space is limited, or when a contentious state change exists. Whilst EIP-1559 attempted to improve the accuracy and predictability of Ethereum transaction fees, the capacity constraints of blockspace mean rank and inclusion latency remain dependant on tips users pay. For this reason, price discovery for blockspace remains inefficient... --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.novarpc.xyz/nova-rpc/why-use-a-private-mempool/understanding-mev/fee-markets.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.