Before August 2021, all transaction fees went directly to miners as revenue. EIP-1559 restructured this system by splitting each fee into two parts: a base fee that is permanently destroyed (burned) and a priority tip that goes to the validator. The base fee adjusts automatically with demand, making fee estimation far more predictable than before. The deflationary consequence of burning fees is significant: during periods of high Ethereum usage, more ETH is destroyed each day than is issued to stakers, making the total supply shrink. The phrase "ultrasound money" became popular in the ETH community to describe this dynamic - a supply that can actually contract unlike most monetary systems.
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