# Why Ethereum burns fees, and why supply does not always fall Ethereum removes the execution base fee from circulation instead of paying it to the block’s fee recipient. Priority fees are separate. Burning is one side of the supply calculation: ETH can still increase in supply when issuance exceeds the ETH removed over the same period. Burning does not guarantee a price outcome. Evidence: [EIP-1559: Fee market change](https://raw.githubusercontent.com/ethereum/EIPs/ac912ca6a9685590345dd8e5736cda75976d0131/EIPS/eip-1559.md); [How ETH supply changed after the Merge](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/roadmap/merge/issuance/index.md) Canonical: https://degreesofsatoshi.com/encyclopedia/ethereum-fee-burning/ Published: 2026-10-02 Substantively modified: 2026-10-02 Independently verified by an automated reviewer: 2026-10-02T15:10:23.134Z AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied. ## Key facts - **Execution base fee:** Burned by protocol accounting ([EIP-1559: Fee market change](https://raw.githubusercontent.com/ethereum/EIPs/ac912ca6a9685590345dd8e5736cda75976d0131/EIPS/eip-1559.md)) - **Priority fee:** Distinct from the burned base fee ([EIP-1559: Fee market change](https://raw.githubusercontent.com/ethereum/EIPs/ac912ca6a9685590345dd8e5736cda75976d0131/EIPS/eip-1559.md)) - **Net supply:** Requires issuance and removal over the same interval ([How ETH supply changed after the Merge](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/roadmap/merge/issuance/index.md)) ## Burning happens in the accounting, not through a company buyback For ordinary execution gas, the base-fee portion is deducted without being credited to a recipient. Calling this a burn describes a reduction in circulating protocol units, not a transfer to a foundation treasury. The priority component is different: it rewards transaction inclusion through the block’s fee recipient. A fee display should therefore distinguish total paid from the portion removed from supply. Evidence: [EIP-1559: Fee market change](https://raw.githubusercontent.com/ethereum/EIPs/ac912ca6a9685590345dd8e5736cda75976d0131/EIPS/eip-1559.md); [Introduction to ether](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/developers/docs/intro-to-ether/index.md) ## Example: a burn can coexist with growing supply Imagine a period with 100 ETH newly issued and 70 ETH burned, ignoring other balance reductions for this illustration. Net supply rises by 30 ETH. If 120 ETH were burned with the same issuance, it would fall by 20 ETH. The example uses invented round numbers, not a measured day. A real calculation needs the same start and end boundaries for both quantities and must account for other relevant protocol reductions. Evidence: [How ETH supply changed after the Merge](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/roadmap/merge/issuance/index.md); [EIP-1559: Fee market change](https://raw.githubusercontent.com/ethereum/EIPs/ac912ca6a9685590345dd8e5736cda75976d0131/EIPS/eip-1559.md) ## Activity affects burning through fee demand The execution base fee adjusts according to block gas use relative to its target. More transactions alone do not specify the amount burned: the resource demand and resulting fee level matter. Blob data has its own fee market and burn. Moving activity between execution, rollups and blob publication can change where costs arise, so a single transaction-count chart cannot reconstruct total burn. Evidence: [EIP-1559: Fee market change](https://raw.githubusercontent.com/ethereum/EIPs/ac912ca6a9685590345dd8e5736cda75976d0131/EIPS/eip-1559.md); [EIP-4844: Shard Blob Transactions](https://raw.githubusercontent.com/ethereum/EIPs/ac912ca6a9685590345dd8e5736cda75976d0131/EIPS/eip-4844.md) ## A supply statistic is not a valuation model Historical periods of declining supply do not promise the same result in a future period. Issuance, usage and protocol parameters are separate inputs, and current claims need a dated measurement. A useful report says how much was issued, how much was removed and during which interval. Statements that ETH must rise in price because fees burn add an economic claim that the fee specification does not establish. Evidence: [How ETH supply changed after the Merge](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/roadmap/merge/issuance/index.md); [EIP-1559: Fee market change](https://raw.githubusercontent.com/ethereum/EIPs/ac912ca6a9685590345dd8e5736cda75976d0131/EIPS/eip-1559.md) ## Questions ### Are all Ethereum transaction fees burned? No. Execution base fees are burned while priority fees are separate. Blob fees have their own accounting, and application charges are not automatically protocol burns. Evidence: [EIP-1559: Fee market change](https://raw.githubusercontent.com/ethereum/EIPs/ac912ca6a9685590345dd8e5736cda75976d0131/EIPS/eip-1559.md); [EIP-4844: Shard Blob Transactions](https://raw.githubusercontent.com/ethereum/EIPs/ac912ca6a9685590345dd8e5736cda75976d0131/EIPS/eip-4844.md) ### Is ETH guaranteed to be deflationary? No. Net supply can increase or decrease depending on issuance and removals over the period being measured. Evidence: [How ETH supply changed after the Merge](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/roadmap/merge/issuance/index.md) ### Did burning begin with the Merge? No. Fee burning began with the London upgrade in 2021. The Merge later changed consensus and removed proof-of-work issuance. Evidence: [Ethereum protocol upgrade history](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/ethereum-forks/index.md); [How ETH supply changed after the Merge](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/roadmap/merge/issuance/index.md) ## Claims and scope ### ethereum-fee-burning-quick-answer Ethereum removes the execution base fee from circulation instead of paying it to the block’s fee recipient. Priority fees are separate. Burning is one side of the supply calculation: ETH can still increase in supply when issuance exceeds the ETH removed over the same period. Burning does not guarantee a price outcome. Scope: {"collection":"ethereum","dataAsOf":null,"blockHeight":null} ### ethereum-fee-burning-fact-execution-base-fee Execution base fee: Burned by protocol accounting Scope: {"collection":"ethereum","dataAsOf":null,"blockHeight":null} ### ethereum-fee-burning-fact-priority-fee Priority fee: Distinct from the burned base fee Scope: {"collection":"ethereum","dataAsOf":null,"blockHeight":null} ### ethereum-fee-burning-fact-net-supply Net supply: Requires issuance and removal over the same interval Scope: {"collection":"ethereum","dataAsOf":null,"blockHeight":null} ## Sources - [EIP-1559: Fee market change](https://raw.githubusercontent.com/ethereum/EIPs/ac912ca6a9685590345dd8e5736cda75976d0131/EIPS/eip-1559.md) — Ethereum Improvement Proposals. Defines the base-fee burn, tip, maximum fee and effective gas price calculation. Locator: Abstract; specification; reference implementation. Retrieved: 2026-10-02T14:35:51.249311+00:00. - [How ETH supply changed after the Merge](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/roadmap/merge/issuance/index.md) — ethereum.org contributors. Supports consensus issuance versus fee burning; historical issuance estimates are not used as current rates. Locator: Post-merge issuance; the burn. Retrieved: 2026-10-02T14:35:44.215542+00:00. - [Introduction to ether](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/developers/docs/intro-to-ether/index.md) — ethereum.org contributors. Defines ETH, wei and gwei, the transaction value field and the role of ETH in fees and staking. Locator: What is ether; denominations; transferring ether. Retrieved: 2026-10-02T14:42:49.460408+00:00. - [EIP-4844: Shard Blob Transactions](https://raw.githubusercontent.com/ethereum/EIPs/ac912ca6a9685590345dd8e5736cda75976d0131/EIPS/eip-4844.md) — Ethereum Improvement Proposals. Defines blob commitments, separately priced blob gas and time-limited data serving; original capacity constants are not treated as current limits. Locator: Abstract; gas accounting; consensus-layer validation; rationale. Retrieved: 2026-10-02T14:35:51.590523+00:00. - [Ethereum protocol upgrade history](https://raw.githubusercontent.com/ethereum/ethereum-org-website/dcc900ff125891da5b6c723b905a7113cf1bd864/public/content/ethereum-forks/index.md) — ethereum.org contributors. Records shipped Pectra changes including EIP-7702 and EIP-7251; supports dated historical upgrade context. Locator: Prague-Electra (Pectra); Paris (The Merge); London. Retrieved: 2026-10-02T14:42:49.753070+00:00. ## Revision history - 2026-10-02: First publication after primary-source research and independent automated verification. ## Cite this entry Degrees of Satoshi editorial project. “Why Ethereum burns fees, and why supply does not always fall.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/ethereum-fee-burning/