EIP-1559
The Ethereum change that replaced blind fee auctions with a protocol-set base fee that is destroyed, plus an optional tip.
Before it, users bid a single gas price in a first-price auction and routinely overpaid or waited, because nobody could see what others were offering. Activated in the London upgrade in 2021, the mechanism sets a base fee that moves up or down with demand toward a target block size, allows blocks to expand temporarily to twice the target, burns the base fee, and pays only the tip to the block producer. The burn is sometimes compared to a corporate share buyback, and the comparison is misleading in a specific way: no entity decides to repurchase anything, there is no balance sheet or cash flow behind it, and the amount destroyed is set purely by how much the network is used. Several other networks have since adopted similar fee designs, and Ethereum's blob fee market works on the same principle with its own separate base fee.
व्यवहार में
Ethereum's blob fee market, introduced with EIP-4844, applies the same base-fee adjustment rule to a second resource priced independently of ordinary gas.
प्रचलित भ्रांति
The burn does not guarantee shrinking supply; it offsets new issuance, and whether total supply falls depends on how heavily the network is used.