EIP-1559 introduces a more efficient and predictable fee structure to Ethereum transactions by replacing the first-price auction system with a model that incorporates a base fee and a priority fee (tip). The base fee adjusts dynamically based on network demand and is burned (removed from circulation), which can help reduce inflation of the Ether supply over time. The change aims to address issues with high gas fees and make transactions more predictable for users, thereby improving the overall user experience.