diff --git a/core/tx_list.go b/core/tx_list.go
index 3e746ff3518e..fd2985af7a95 100644
--- a/core/tx_list.go
+++ b/core/tx_list.go
@@ -23,6 +23,7 @@ import (
 	"sort"
 	"sync"
 	"sync/atomic"
+	"time"
 
 	"github.com/XinFinOrg/XDPoSChain/common"
 	"github.com/XinFinOrg/XDPoSChain/core/types"
@@ -284,15 +285,23 @@ func (l *txList) Add(tx *types.Transaction, priceBump uint64) (bool, *types.Tran
 		return false, nil
 	}
 	if old != nil {
-		// threshold = oldGP * (100 + priceBump) / 100
+		if old.FeeCapCmp(tx) >= 0 || old.TipCmp(tx) >= 0 {
+			return false, nil
+		}
+		// thresholdFeeCap = oldFC  * (100 + priceBump) / 100
 		a := big.NewInt(100 + int64(priceBump))
-		a = a.Mul(a, old.GasPrice())
+		aFeeCap := new(big.Int).Mul(a, old.FeeCap())
+		aTip := a.Mul(a, old.Tip())
+
+		// thresholdTip    = oldTip * (100 + priceBump) / 100
 		b := big.NewInt(100)
-		threshold := a.Div(a, b)
-		// Have to ensure that the new gas price is higher than the old gas
-		// price as well as checking the percentage threshold to ensure that
+		thresholdFeeCap := aFeeCap.Div(aFeeCap, b)
+		thresholdTip := aTip.Div(aTip, b)
+
+		// Have to ensure that either the new fee cap or tip is higher than the
+		// old ones as well as checking the percentage threshold to ensure that
 		// this is accurate for low (Wei-level) gas price replacements
-		if old.GasPriceCmp(tx) >= 0 || tx.GasPriceIntCmp(threshold) < 0 {
+		if tx.FeeCapIntCmp(thresholdFeeCap) < 0 || tx.TipIntCmp(thresholdTip) < 0 {
 			return false, nil
 		}
 	}
@@ -417,33 +426,54 @@ func (l *txList) LastElement() *types.Transaction {
 }
 
 // priceHeap is a heap.Interface implementation over transactions for retrieving
-// price-sorted transactions to discard when the pool fills up.
-type priceHeap []*types.Transaction
+// price-sorted transactions to discard when the pool fills up. If baseFee is set
+// then the heap is sorted based on the effective tip based on the given base fee.
+// If baseFee is nil then the sorting is based on feeCap.
+type priceHeap struct {
+	baseFee *big.Int // heap should always be re-sorted after baseFee is changed
+	list    []*types.Transaction
+}
 
-func (h priceHeap) Len() int      { return len(h) }
-func (h priceHeap) Swap(i, j int) { h[i], h[j] = h[j], h[i] }
+func (h *priceHeap) Len() int      { return len(h.list) }
+func (h *priceHeap) Swap(i, j int) { h.list[i], h.list[j] = h.list[j], h.list[i] }
 
-func (h priceHeap) Less(i, j int) bool {
-	// Sort primarily by price, returning the cheaper one
-	switch h[i].GasPriceCmp(h[j]) {
+func (h *priceHeap) Less(i, j int) bool {
+	switch h.cmp(h.list[i], h.list[j]) {
 	case -1:
 		return true
 	case 1:
 		return false
+	default:
+		return h.list[i].Nonce() > h.list[j].Nonce()
+	}
+}
+
+func (h *priceHeap) cmp(a, b *types.Transaction) int {
+	if h.baseFee != nil {
+		// Compare effective tips if baseFee is specified
+		if c := a.EffectiveTipCmp(b, h.baseFee); c != 0 {
+			return c
+		}
+	}
+	// Compare fee caps if baseFee is not specified or effective tips are equal
+	if c := a.FeeCapCmp(b); c != 0 {
+		return c
 	}
-	// If the prices match, stabilize via nonces (high nonce is worse)
-	return h[i].Nonce() > h[j].Nonce()
+	// Compare tips if effective tips and fee caps are equal
+	return a.TipCmp(b)
 }
 
 func (h *priceHeap) Push(x interface{}) {
-	*h = append(*h, x.(*types.Transaction))
+	tx := x.(*types.Transaction)
+	h.list = append(h.list, tx)
 }
 
 func (h *priceHeap) Pop() interface{} {
-	old := *h
+	old := h.list
 	n := len(old)
 	x := old[n-1]
-	*h = old[0 : n-1]
+	old[n-1] = nil
+	h.list = old[0 : n-1]
 	return x
 }
 
@@ -451,18 +481,30 @@ func (h *priceHeap) Pop() interface{} {
 // contents in a price-incrementing way. It's built opon the all transactions
 // in txpool but only interested in the remote part. It means only remote transactions
 // will be considered for tracking, sorting, eviction, etc.
+//
+// Two heaps are used for sorting: the urgent heap (based on effective tip in the next
+// block) and the floating heap (based on feeCap). Always the bigger heap is chosen for
+// eviction. Transactions evicted from the urgent heap are first demoted into the floating heap.
+// In some cases (during a congestion, when blocks are full) the urgent heap can provide
+// better candidates for inclusion while in other cases (at the top of the baseFee peak)
+// the floating heap is better. When baseFee is decreasing they behave similarly.
 type txPricedList struct {
-	all      *txLookup  // Pointer to the map of all transactions
-	remotes  *priceHeap // Heap of prices of all the stored **remote** transactions
-	stales   int64      // Number of stale price points to (re-heap trigger)
-	reheapMu sync.Mutex // Mutex asserts that only one routine is reheaping the list
+	all              *txLookup  // Pointer to the map of all transactions
+	urgent, floating priceHeap  // Heaps of prices of all the stored **remote** transactions
+	stales           int64      // Number of stale price points to (re-heap trigger)
+	reheapMu         sync.Mutex // Mutex asserts that only one routine is reheaping the list
 }
 
+const (
+	// urgentRatio : floatingRatio is the capacity ratio of the two queues
+	urgentRatio   = 4
+	floatingRatio = 1
+)
+
 // newTxPricedList creates a new price-sorted transaction heap.
 func newTxPricedList(all *txLookup) *txPricedList {
 	return &txPricedList{
-		all:     all,
-		remotes: new(priceHeap),
+		all: all,
 	}
 }
 
@@ -471,7 +513,8 @@ func (l *txPricedList) Put(tx *types.Transaction, local bool) {
 	if local {
 		return
 	}
-	heap.Push(l.remotes, tx)
+	// Insert every new transaction to the urgent heap first; Discard will balance the heaps
+	heap.Push(&l.urgent, tx)
 }
 
 // Removed notifies the prices transaction list that an old transaction dropped
@@ -480,58 +523,43 @@ func (l *txPricedList) Put(tx *types.Transaction, local bool) {
 func (l *txPricedList) Removed(count int) {
 	// Bump the stale counter, but exit if still too low (< 25%)
 	stales := atomic.AddInt64(&l.stales, int64(count))
-	if int(stales) <= len(*l.remotes)/4 {
+	if int(stales) <= (len(l.urgent.list)+len(l.floating.list))/4 {
 		return
 	}
 	// Seems we've reached a critical number of stale transactions, reheap
 	l.Reheap()
 }
 
-// Cap finds all the transactions below the given price threshold, drops them
-// from the priced list and returns them for further removal from the entire pool.
-//
-// Note: only remote transactions will be considered for eviction.
-func (l *txPricedList) Cap(threshold *big.Int) types.Transactions {
-	drop := make(types.Transactions, 0, 128) // Remote underpriced transactions to drop
-	for len(*l.remotes) > 0 {
-		// Discard stale transactions if found during cleanup
-		cheapest := (*l.remotes)[0]
-		if l.all.GetRemote(cheapest.Hash()) == nil { // Removed or migrated
-			heap.Pop(l.remotes)
-			l.stales--
-			continue
-		}
-		// Stop the discards if we've reached the threshold
-		if cheapest.GasPriceIntCmp(threshold) >= 0 {
-			break
-		}
-		heap.Pop(l.remotes)
-		drop = append(drop, cheapest)
-	}
-	return drop
-}
-
 // Underpriced checks whether a transaction is cheaper than (or as cheap as) the
 // lowest priced (remote) transaction currently being tracked.
 func (l *txPricedList) Underpriced(tx *types.Transaction) bool {
+	// Note: with two queues, being underpriced is defined as being worse than the worst item
+	// in all non-empty queues if there is any. If both queues are empty then nothing is underpriced.
+	return (l.underpricedFor(&l.urgent, tx) || len(l.urgent.list) == 0) &&
+		(l.underpricedFor(&l.floating, tx) || len(l.floating.list) == 0) &&
+		(len(l.urgent.list) != 0 || len(l.floating.list) != 0)
+}
+
+// underpricedFor checks whether a transaction is cheaper than (or as cheap as) the
+// lowest priced (remote) transaction in the given heap.
+func (l *txPricedList) underpricedFor(h *priceHeap, tx *types.Transaction) bool {
 	// Discard stale price points if found at the heap start
-	for len(*l.remotes) > 0 {
-		head := []*types.Transaction(*l.remotes)[0]
+	for len(h.list) > 0 {
+		head := h.list[0]
 		if l.all.GetRemote(head.Hash()) == nil { // Removed or migrated
 			atomic.AddInt64(&l.stales, -1)
-			heap.Pop(l.remotes)
+			heap.Pop(h)
 			continue
 		}
 		break
 	}
 	// Check if the transaction is underpriced or not
-	if len(*l.remotes) == 0 {
+	if len(h.list) == 0 {
 		return false // There is no remote transaction at all.
 	}
 	// If the remote transaction is even cheaper than the
 	// cheapest one tracked locally, reject it.
-	cheapest := []*types.Transaction(*l.remotes)[0]
-	return cheapest.GasPriceCmp(tx) >= 0
+	return h.cmp(h.list[0], tx) >= 0
 }
 
 // Discard finds a number of most underpriced transactions, removes them from the
@@ -540,21 +568,36 @@ func (l *txPricedList) Underpriced(tx *types.Transaction) bool {
 // Note local transaction won't be considered for eviction.
 func (l *txPricedList) Discard(slots int, force bool) (types.Transactions, bool) {
 	drop := make(types.Transactions, 0, slots) // Remote underpriced transactions to drop
-	for len(*l.remotes) > 0 && slots > 0 {
-		// Discard stale transactions if found during cleanup
-		tx := heap.Pop(l.remotes).(*types.Transaction)
-		if l.all.GetRemote(tx.Hash()) == nil { // Removed or migrated
-			atomic.AddInt64(&l.stales, -1)
-			continue
+	for slots > 0 {
+		if len(l.urgent.list)*floatingRatio > len(l.floating.list)*urgentRatio || floatingRatio == 0 {
+			// Discard stale transactions if found during cleanup
+			tx := heap.Pop(&l.urgent).(*types.Transaction)
+			if l.all.GetRemote(tx.Hash()) == nil { // Removed or migrated
+				atomic.AddInt64(&l.stales, -1)
+				continue
+			}
+			// Non stale transaction found, move to floating heap
+			heap.Push(&l.floating, tx)
+		} else {
+			if len(l.floating.list) == 0 {
+				// Stop if both heaps are empty
+				break
+			}
+			// Discard stale transactions if found during cleanup
+			tx := heap.Pop(&l.floating).(*types.Transaction)
+			if l.all.GetRemote(tx.Hash()) == nil { // Removed or migrated
+				atomic.AddInt64(&l.stales, -1)
+				continue
+			}
+			// Non stale transaction found, discard it
+			drop = append(drop, tx)
+			slots -= numSlots(tx)
 		}
-		// Non stale transaction found, discard it
-		drop = append(drop, tx)
-		slots -= numSlots(tx)
 	}
 	// If we still can't make enough room for the new transaction
 	if slots > 0 && !force {
 		for _, tx := range drop {
-			heap.Push(l.remotes, tx)
+			heap.Push(&l.urgent, tx)
 		}
 		return nil, false
 	}
@@ -565,13 +608,32 @@ func (l *txPricedList) Discard(slots int, force bool) (types.Transactions, bool)
 func (l *txPricedList) Reheap() {
 	l.reheapMu.Lock()
 	defer l.reheapMu.Unlock()
-	reheap := make(priceHeap, 0, l.all.RemoteCount())
-
+	start := time.Now()
 	atomic.StoreInt64(&l.stales, 0)
-	l.remotes = &reheap
+	l.urgent.list = make([]*types.Transaction, 0, l.all.RemoteCount())
 	l.all.Range(func(hash common.Hash, tx *types.Transaction, local bool) bool {
-		*l.remotes = append(*l.remotes, tx)
+		l.urgent.list = append(l.urgent.list, tx)
 		return true
 	}, false, true) // Only iterate remotes
-	heap.Init(l.remotes)
+	heap.Init(&l.urgent)
+
+	// balance out the two heaps by moving the worse half of transactions into the
+	// floating heap
+	// Note: Discard would also do this before the first eviction but Reheap can do
+	// is more efficiently. Also, Underpriced would work suboptimally the first time
+	// if the floating queue was empty.
+	floatingCount := len(l.urgent.list) * floatingRatio / (urgentRatio + floatingRatio)
+	l.floating.list = make([]*types.Transaction, floatingCount)
+	for i := 0; i < floatingCount; i++ {
+		l.floating.list[i] = heap.Pop(&l.urgent).(*types.Transaction)
+	}
+	heap.Init(&l.floating)
+	reheapTimer.Update(time.Since(start))
+}
+
+// SetBaseFee updates the base fee and triggers a re-heap. Note that Removed is not
+// necessary to call right before SetBaseFee when processing a new block.
+func (l *txPricedList) SetBaseFee(baseFee *big.Int) {
+	l.urgent.baseFee = baseFee
+	l.Reheap()
 }
diff --git a/core/tx_pool.go b/core/tx_pool.go
index 813c9a1a86f6..795a84d6e8d1 100644
--- a/core/tx_pool.go
+++ b/core/tx_pool.go
@@ -106,6 +106,10 @@ var (
 	ErrDuplicateSpecialTransaction = errors.New("duplicate a special transaction")
 
 	ErrMinDeploySMC = errors.New("smart contract creation cost is under allowance")
+
+	// ErrTipAboveFeeCap is a sanity error to ensure no one is able to specify a
+	// transaction with a tip higher than the total fee cap.
+	ErrTipAboveFeeCap = errors.New("tip higher than fee cap")
 )
 
 var (
@@ -138,6 +142,8 @@ var (
 	queuedGauge  = metrics.NewRegisteredGauge("txpool/queued", nil)
 	localGauge   = metrics.NewRegisteredGauge("txpool/local", nil)
 	slotsGauge   = metrics.NewRegisteredGauge("txpool/slots", nil)
+
+	reheapTimer = metrics.NewRegisteredTimer("txpool/reheap", nil)
 )
 
 // TxStatus is the current status of a transaction as seen by the pool.
@@ -199,7 +205,7 @@ var DefaultTxPoolConfig = TxPoolConfig{
 	PriceBump:  10,
 
 	AccountSlots: 16,
-	GlobalSlots:  4096,
+	GlobalSlots:  4096 + 1024, // urgent + floating queue capacity with 4:1 ratio
 	AccountQueue: 64,
 	GlobalQueue:  1024,
 
@@ -262,6 +268,9 @@ type TxPool struct {
 	signer      types.Signer
 	mu          sync.RWMutex
 
+	eip2718 bool // Fork indicator whether we are using EIP-2718 type transactions.
+	eip1559 bool // Fork indicator whether we are using EIP-1559 type transactions.
+
 	currentState  *state.StateDB // Current state in the blockchain head
 	pendingNonces *txNoncer      // Pending state tracking virtual nonces
 	currentMaxGas uint64         // Current gas limit for transaction caps
@@ -285,7 +294,6 @@ type TxPool struct {
 	wg              sync.WaitGroup // tracks loop, scheduleReorgLoop
 	initDoneCh      chan struct{}  // is closed once the pool is initialized (for tests)
 
-	eip2718          bool // Fork indicator whether we are using EIP-2718 type transactions.
 	IsSigner         func(address common.Address) bool
 	trc21FeeCapacity map[common.Address]*big.Int
 }
@@ -466,10 +474,18 @@ func (pool *TxPool) SetGasPrice(price *big.Int) {
 	pool.mu.Lock()
 	defer pool.mu.Unlock()
 
+	old := pool.gasPrice
 	pool.gasPrice = price
-	for _, tx := range pool.priced.Cap(price) {
-		pool.removeTx(tx.Hash(), false)
+	// if the min miner fee increased, remove transactions below the new threshold
+	if price.Cmp(old) > 0 {
+		// pool.priced is sorted by FeeCap, so we have to iterate through pool.all instead
+		drop := pool.all.RemotesBelowTip(price)
+		for _, tx := range drop {
+			pool.removeTx(tx.Hash(), false)
+		}
+		pool.priced.Removed(len(drop))
 	}
+
 	log.Info("Transaction pool price threshold updated", "price", price)
 }
 
@@ -575,6 +591,10 @@ func (pool *TxPool) validateTx(tx *types.Transaction, local bool) error {
 	if !pool.eip2718 && tx.Type() != types.LegacyTxType {
 		return ErrTxTypeNotSupported
 	}
+	// Reject dynamic fee transactions until EIP-1559 activates.
+	if !pool.eip1559 && tx.Type() == types.DynamicFeeTxType {
+		return ErrTxTypeNotSupported
+	}
 	// Reject transactions over defined size to prevent DOS attacks
 	if uint64(tx.Size()) > txMaxSize {
 		return ErrOversizedData
@@ -596,13 +616,17 @@ func (pool *TxPool) validateTx(tx *types.Transaction, local bool) error {
 	if pool.currentMaxGas < tx.Gas() {
 		return ErrGasLimit
 	}
+	// Ensure feeCap is less than or equal to tip.
+	if tx.FeeCapIntCmp(tx.Tip()) < 0 {
+		return ErrTipAboveFeeCap
+	}
 	// Make sure the transaction is signed properly.
 	from, err := types.Sender(pool.signer, tx)
 	if err != nil {
 		return ErrInvalidSender
 	}
-	// Drop non-local transactions under our own minimal accepted gas price
-	if !local && tx.GasPriceIntCmp(pool.gasPrice) < 0 {
+	// Drop non-local transactions under our own minimal accepted gas price or tip
+	if !local && tx.TipIntCmp(pool.gasPrice) < 0 {
 		if !tx.IsSpecialTransaction() || (pool.IsSigner != nil && !pool.IsSigner(from)) {
 			return ErrUnderpriced
 		}
@@ -712,10 +736,9 @@ func (pool *TxPool) add(tx *types.Transaction, local bool) (replaced bool, err e
 	}
 	// If the transaction pool is full, discard underpriced transactions
 	if uint64(pool.all.Slots()+numSlots(tx)) > pool.config.GlobalSlots+pool.config.GlobalQueue {
-		log.Debug("Add transaction to pool full", "hash", hash, "nonce", tx.Nonce())
 		// If the new transaction is underpriced, don't accept it
 		if !isLocal && pool.priced.Underpriced(tx) {
-			log.Trace("Discarding underpriced transaction", "hash", hash, "price", tx.GasPrice())
+			log.Trace("Discarding underpriced transaction", "hash", hash, "tip", tx.Tip(), "feeCap", tx.FeeCap())
 			underpricedTxMeter.Mark(1)
 			return false, ErrUnderpriced
 		}
@@ -732,7 +755,7 @@ func (pool *TxPool) add(tx *types.Transaction, local bool) (replaced bool, err e
 		}
 		// Kick out the underpriced remote transactions.
 		for _, tx := range drop {
-			log.Trace("Discarding freshly underpriced transaction", "hash", tx.Hash(), "price", tx.GasPrice())
+			log.Trace("Discarding freshly underpriced transaction", "hash", tx.Hash(), "tip", tx.Tip(), "feeCap", tx.FeeCap())
 			underpricedTxMeter.Mark(1)
 			pool.removeTx(tx.Hash(), false)
 		}
@@ -1243,6 +1266,9 @@ func (pool *TxPool) runReorg(done chan struct{}, reset *txpoolResetRequest, dirt
 	// because of another transaction (e.g. higher gas price).
 	if reset != nil {
 		pool.demoteUnexecutables()
+		if reset.newHead != nil {
+			pool.priced.SetBaseFee(reset.newHead.BaseFee)
+		}
 	}
 	// Ensure pool.queue and pool.pending sizes stay within the configured limits.
 	pool.truncatePending()
@@ -1360,6 +1386,7 @@ func (pool *TxPool) reset(oldHead, newHead *types.Header) {
 	// Update all fork indicator by next pending block number.
 	next := new(big.Int).Add(newHead.Number, big.NewInt(1))
 	pool.eip2718 = pool.chainconfig.IsEIP1559(next)
+	pool.eip1559 = pool.chainconfig.IsEIP1559(next)
 }
 
 // promoteExecutables moves transactions that have become processable from the
@@ -1572,6 +1599,10 @@ func (pool *TxPool) truncateQueue() {
 // demoteUnexecutables removes invalid and processed transactions from the pools
 // executable/pending queue and any subsequent transactions that become unexecutable
 // are moved back into the future queue.
+//
+// Note: transactions are not marked as removed in the priced list because re-heaping
+// is always explicitly triggered by SetBaseFee and it would be unnecessary and wasteful
+// to trigger a re-heap is this function
 func (pool *TxPool) demoteUnexecutables() {
 	// Iterate over all accounts and demote any non-executable transactions
 	for addr, list := range pool.pending {
@@ -1877,6 +1908,18 @@ func (t *txLookup) RemoteToLocals(locals *accountSet) int {
 	return migrated
 }
 
+// RemotesBelowTip finds all remote transactions below the given tip threshold.
+func (t *txLookup) RemotesBelowTip(threshold *big.Int) types.Transactions {
+	found := make(types.Transactions, 0, 128)
+	t.Range(func(hash common.Hash, tx *types.Transaction, local bool) bool {
+		if tx.TipIntCmp(threshold) < 0 {
+			found = append(found, tx)
+		}
+		return true
+	}, false, true) // Only iterate remotes
+	return found
+}
+
 // numSlots calculates the number of slots needed for a single transaction.
 func numSlots(tx *types.Transaction) int {
 	return int((tx.Size() + txSlotSize - 1) / txSlotSize)
diff --git a/core/tx_pool_test.go b/core/tx_pool_test.go
index 62e1d70a61da..f73d6f92bc8c 100644
--- a/core/tx_pool_test.go
+++ b/core/tx_pool_test.go
@@ -36,13 +36,23 @@ import (
 	"github.com/XinFinOrg/XDPoSChain/params"
 )
 
-// testTxPoolConfig is a transaction pool configuration without stateful disk
-// sideeffects used during testing.
-var testTxPoolConfig TxPoolConfig
+var (
+	// testTxPoolConfig is a transaction pool configuration without stateful disk
+	// sideeffects used during testing.
+	testTxPoolConfig TxPoolConfig
+
+	// eip1559Config is a chain config with EIP-1559 enabled at block 0.
+	eip1559Config *params.ChainConfig
+)
 
 func init() {
 	testTxPoolConfig = DefaultTxPoolConfig
 	testTxPoolConfig.Journal = ""
+
+	cpy := *params.TestChainConfig
+	eip1559Config = &cpy
+	eip1559Config.BerlinBlock = common.Big0
+	eip1559Config.Eip1559Block = common.Big0
 }
 
 type testBlockChain struct {
@@ -102,13 +112,32 @@ func pricedDataTransaction(nonce uint64, gaslimit uint64, gasprice *big.Int, key
 	return tx
 }
 
+func dynamicFeeTx(nonce uint64, gaslimit uint64, gasFee *big.Int, tip *big.Int, key *ecdsa.PrivateKey) *types.Transaction {
+	tx, _ := types.SignNewTx(key, types.LatestSignerForChainID(params.TestChainConfig.ChainId), &types.DynamicFeeTx{
+		ChainID:    params.TestChainConfig.ChainId,
+		Nonce:      nonce,
+		Tip:        tip,
+		FeeCap:     gasFee,
+		Gas:        gaslimit,
+		To:         &common.Address{},
+		Value:      big.NewInt(100),
+		Data:       nil,
+		AccessList: nil,
+	})
+	return tx
+}
+
 func setupTxPool() (*TxPool, *ecdsa.PrivateKey) {
+	return setupTxPoolWithConfig(params.TestChainConfig)
+}
+
+func setupTxPoolWithConfig(config *params.ChainConfig) (*TxPool, *ecdsa.PrivateKey) {
 	diskdb := rawdb.NewMemoryDatabase()
 	statedb, _ := state.New(common.Hash{}, state.NewDatabase(diskdb))
 	blockchain := &testBlockChain{statedb, 10000000, new(event.Feed)}
 
 	key, _ := crypto.GenerateKey()
-	pool := NewTxPool(testTxPoolConfig, params.TestChainConfig, blockchain)
+	pool := NewTxPool(testTxPoolConfig, config, blockchain)
 
 	// wait for the pool to initialize
 	<-pool.initDoneCh
@@ -126,7 +155,7 @@ func validateTxPoolInternals(pool *TxPool) error {
 		return fmt.Errorf("total transaction count %d != %d pending + %d queued", total, pending, queued)
 	}
 	pool.priced.Reheap()
-	priced, remote := pool.priced.remotes.Len(), pool.all.RemoteCount()
+	priced, remote := pool.priced.urgent.Len()+pool.priced.floating.Len(), pool.all.RemoteCount()
 	if priced != remote {
 		return fmt.Errorf("total priced transaction count %d != %d", priced, remote)
 	}
@@ -253,6 +282,18 @@ func TestStateChangeDuringTransactionPoolReset(t *testing.T) {
 	}
 }
 
+func testAddBalance(pool *TxPool, addr common.Address, amount *big.Int) {
+	pool.mu.Lock()
+	pool.currentState.AddBalance(addr, amount)
+	pool.mu.Unlock()
+}
+
+func testSetNonce(pool *TxPool, addr common.Address, nonce uint64) {
+	pool.mu.Lock()
+	pool.currentState.SetNonce(addr, nonce)
+	pool.mu.Unlock()
+}
+
 func TestInvalidTransactions(t *testing.T) {
 	t.Parallel()
 
@@ -262,19 +303,19 @@ func TestInvalidTransactions(t *testing.T) {
 	tx := transaction(0, 100, key)
 	from, _ := deriveSender(tx)
 
-	pool.currentState.AddBalance(from, big.NewInt(1))
+	testAddBalance(pool, from, big.NewInt(1))
 	if err := pool.AddRemote(tx); err != ErrInsufficientFunds {
 		t.Error("expected", ErrInsufficientFunds)
 	}
 
 	balance := new(big.Int).Add(tx.Value(), new(big.Int).Mul(new(big.Int).SetUint64(tx.Gas()), tx.GasPrice()))
-	pool.currentState.AddBalance(from, balance)
+	testAddBalance(pool, from, balance)
 	if err := pool.AddRemote(tx); err != ErrIntrinsicGas {
 		t.Error("expected", ErrIntrinsicGas, "got", err)
 	}
 
-	pool.currentState.SetNonce(from, 1)
-	pool.currentState.AddBalance(from, big.NewInt(0xffffffffffffff))
+	testSetNonce(pool, from, 1)
+	testAddBalance(pool, from, big.NewInt(0xffffffffffffff))
 	tx = transaction(0, 100000, key)
 	if err := pool.AddRemote(tx); err != ErrNonceTooLow {
 		t.Error("expected", ErrNonceTooLow)
@@ -298,7 +339,7 @@ func TestTransactionQueue(t *testing.T) {
 
 	tx := transaction(0, 100, key)
 	from, _ := deriveSender(tx)
-	pool.currentState.AddBalance(from, big.NewInt(1000))
+	testAddBalance(pool, from, big.NewInt(1000))
 	<-pool.requestReset(nil, nil)
 
 	pool.enqueueTx(tx.Hash(), tx, false, true)
@@ -309,7 +350,7 @@ func TestTransactionQueue(t *testing.T) {
 
 	tx = transaction(1, 100, key)
 	from, _ = deriveSender(tx)
-	pool.currentState.SetNonce(from, 2)
+	testSetNonce(pool, from, 2)
 	pool.enqueueTx(tx.Hash(), tx, false, true)
 
 	<-pool.requestPromoteExecutables(newAccountSet(pool.signer, from))
@@ -332,7 +373,7 @@ func TestTransactionQueue2(t *testing.T) {
 	tx2 := transaction(10, 100, key)
 	tx3 := transaction(11, 100, key)
 	from, _ := deriveSender(tx1)
-	pool.currentState.AddBalance(from, big.NewInt(1000))
+	testAddBalance(pool, from, big.NewInt(1000))
 	pool.reset(nil, nil)
 
 	pool.enqueueTx(tx1.Hash(), tx1, false, true)
@@ -356,12 +397,25 @@ func TestTransactionNegativeValue(t *testing.T) {
 
 	tx, _ := types.SignTx(types.NewTransaction(0, common.Address{}, big.NewInt(-1), 100, big.NewInt(1), nil), types.HomesteadSigner{}, key)
 	from, _ := deriveSender(tx)
-	pool.currentState.AddBalance(from, big.NewInt(1))
+	testAddBalance(pool, from, big.NewInt(1))
 	if err := pool.AddRemote(tx); err != ErrNegativeValue {
 		t.Error("expected", ErrNegativeValue, "got", err)
 	}
 }
 
+func TestTransactionTipAboveFeeCap(t *testing.T) {
+	t.Parallel()
+
+	pool, key := setupTxPoolWithConfig(eip1559Config)
+	defer pool.Stop()
+
+	tx := dynamicFeeTx(0, 100, big.NewInt(1), big.NewInt(2), key)
+
+	if err := pool.AddRemote(tx); err != ErrTipAboveFeeCap {
+		t.Error("expected", ErrTipAboveFeeCap, "got", err)
+	}
+}
+
 func TestTransactionChainFork(t *testing.T) {
 	t.Parallel()
 
@@ -451,7 +505,7 @@ func TestTransactionMissingNonce(t *testing.T) {
 	defer pool.Stop()
 
 	addr := crypto.PubkeyToAddress(key.PublicKey)
-	pool.currentState.AddBalance(addr, big.NewInt(100000000000000))
+	testAddBalance(pool, addr, big.NewInt(100000000000000))
 	tx := transaction(1, 100000, key)
 	if _, err := pool.add(tx, false); err != nil {
 		t.Error("didn't expect error", err)
@@ -475,8 +529,8 @@ func TestTransactionNonceRecovery(t *testing.T) {
 	defer pool.Stop()
 
 	addr := crypto.PubkeyToAddress(key.PublicKey)
-	pool.currentState.SetNonce(addr, n)
-	pool.currentState.AddBalance(addr, big.NewInt(100000000000000))
+	testSetNonce(pool, addr, n)
+	testAddBalance(pool, addr, big.NewInt(100000000000000))
 	<-pool.requestReset(nil, nil)
 
 	tx := transaction(n, 100000, key)
@@ -484,7 +538,7 @@ func TestTransactionNonceRecovery(t *testing.T) {
 		t.Error(err)
 	}
 	// simulate some weird re-order of transactions and missing nonce(s)
-	pool.currentState.SetNonce(addr, n-1)
+	testSetNonce(pool, addr, n-1)
 	<-pool.requestReset(nil, nil)
 	if fn := pool.Nonce(addr); fn != n-1 {
 		t.Errorf("expected nonce to be %d, got %d", n-1, fn)
@@ -501,7 +555,7 @@ func TestTransactionDropping(t *testing.T) {
 	defer pool.Stop()
 
 	account := crypto.PubkeyToAddress(key.PublicKey)
-	pool.currentState.AddBalance(account, big.NewInt(1000))
+	testAddBalance(pool, account, big.NewInt(1000))
 
 	// Add some pending and some queued transactions
 	var (
@@ -549,7 +603,7 @@ func TestTransactionDropping(t *testing.T) {
 		t.Errorf("total transaction mismatch: have %d, want %d", pool.all.Count(), 6)
 	}
 	// Reduce the balance of the account, and check that invalidated transactions are dropped
-	pool.currentState.AddBalance(account, big.NewInt(-650))
+	testAddBalance(pool, account, big.NewInt(-650))
 	<-pool.requestReset(nil, nil)
 
 	if _, ok := pool.pending[account].txs.items[tx0.Nonce()]; !ok {
@@ -616,7 +670,7 @@ func TestTransactionPostponing(t *testing.T) {
 		keys[i], _ = crypto.GenerateKey()
 		accs[i] = crypto.PubkeyToAddress(keys[i].PublicKey)
 
-		pool.currentState.AddBalance(crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(50100))
+		testAddBalance(pool, crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(50100))
 	}
 	// Add a batch consecutive pending transactions for validation
 	txs := []*types.Transaction{}
@@ -659,7 +713,7 @@ func TestTransactionPostponing(t *testing.T) {
 	}
 	// Reduce the balance of the account, and check that transactions are reorganised
 	for _, addr := range accs {
-		pool.currentState.AddBalance(addr, big.NewInt(-1))
+		testAddBalance(pool, addr, big.NewInt(-1))
 	}
 	<-pool.requestReset(nil, nil)
 
@@ -720,7 +774,7 @@ func TestTransactionGapFilling(t *testing.T) {
 	defer pool.Stop()
 
 	account := crypto.PubkeyToAddress(key.PublicKey)
-	pool.currentState.AddBalance(account, big.NewInt(1000000))
+	testAddBalance(pool, account, big.NewInt(1000000))
 
 	// Keep track of transaction events to ensure all executables get announced
 	events := make(chan NewTxsEvent, testTxPoolConfig.AccountQueue+5)
@@ -774,7 +828,7 @@ func TestTransactionQueueAccountLimiting(t *testing.T) {
 	defer pool.Stop()
 
 	account := crypto.PubkeyToAddress(key.PublicKey)
-	pool.currentState.AddBalance(account, big.NewInt(1000000))
+	testAddBalance(pool, account, big.NewInt(1000000))
 	testTxPoolConfig.AccountQueue = 10
 	// Keep queuing up transactions and make sure all above a limit are dropped
 	for i := uint64(1); i <= testTxPoolConfig.AccountQueue; i++ {
@@ -831,7 +885,7 @@ func testTransactionQueueGlobalLimiting(t *testing.T, nolocals bool) {
 	keys := make([]*ecdsa.PrivateKey, 5)
 	for i := 0; i < len(keys); i++ {
 		keys[i], _ = crypto.GenerateKey()
-		pool.currentState.AddBalance(crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(1000000))
+		testAddBalance(pool, crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(1000000))
 	}
 	local := keys[len(keys)-1]
 
@@ -923,8 +977,8 @@ func testTransactionQueueTimeLimiting(t *testing.T, nolocals bool) {
 	local, _ := crypto.GenerateKey()
 	remote, _ := crypto.GenerateKey()
 
-	pool.currentState.AddBalance(crypto.PubkeyToAddress(local.PublicKey), big.NewInt(1000000000))
-	pool.currentState.AddBalance(crypto.PubkeyToAddress(remote.PublicKey), big.NewInt(1000000000))
+	testAddBalance(pool, crypto.PubkeyToAddress(local.PublicKey), big.NewInt(1000000000))
+	testAddBalance(pool, crypto.PubkeyToAddress(remote.PublicKey), big.NewInt(1000000000))
 
 	// Add the two transactions and ensure they both are queued up
 	if err := pool.AddLocal(pricedTransaction(1, 100000, big.NewInt(1), local)); err != nil {
@@ -1057,7 +1111,7 @@ func TestTransactionPendingLimiting(t *testing.T) {
 	defer pool.Stop()
 
 	account := crypto.PubkeyToAddress(key.PublicKey)
-	pool.currentState.AddBalance(account, big.NewInt(1000000))
+	testAddBalance(pool, account, big.NewInt(1000000))
 	testTxPoolConfig.AccountQueue = 10
 	// Keep track of transaction events to ensure all executables get announced
 	events := make(chan NewTxsEvent, testTxPoolConfig.AccountQueue)
@@ -1108,7 +1162,7 @@ func TestTransactionPendingGlobalLimiting(t *testing.T) {
 	keys := make([]*ecdsa.PrivateKey, 5)
 	for i := 0; i < len(keys); i++ {
 		keys[i], _ = crypto.GenerateKey()
-		pool.currentState.AddBalance(crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(1000000))
+		testAddBalance(pool, crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(1000000))
 	}
 	// Generate and queue a batch of transactions
 	nonces := make(map[common.Address]uint64)
@@ -1147,7 +1201,7 @@ func TestTransactionAllowedTxSize(t *testing.T) {
 	defer pool.Stop()
 
 	account := crypto.PubkeyToAddress(key.PublicKey)
-	pool.currentState.AddBalance(account, big.NewInt(1000000000))
+	testAddBalance(pool, account, big.NewInt(1000000000))
 
 	// Compute maximal data size for transactions (lower bound).
 	//
@@ -1212,7 +1266,7 @@ func TestTransactionCapClearsFromAll(t *testing.T) {
 	// Create a number of test accounts and fund them
 	key, _ := crypto.GenerateKey()
 	addr := crypto.PubkeyToAddress(key.PublicKey)
-	pool.currentState.AddBalance(addr, big.NewInt(1000000))
+	testAddBalance(pool, addr, big.NewInt(1000000))
 
 	txs := types.Transactions{}
 	for j := 0; j < int(config.GlobalSlots)*2; j++ {
@@ -1246,7 +1300,7 @@ func TestTransactionPendingMinimumAllowance(t *testing.T) {
 	keys := make([]*ecdsa.PrivateKey, 5)
 	for i := 0; i < len(keys); i++ {
 		keys[i], _ = crypto.GenerateKey()
-		pool.currentState.AddBalance(crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(1000000))
+		testAddBalance(pool, crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(1000000))
 	}
 	// Generate and queue a batch of transactions
 	nonces := make(map[common.Address]uint64)
@@ -1297,7 +1351,7 @@ func TestTransactionPoolRepricing(t *testing.T) {
 	keys := make([]*ecdsa.PrivateKey, 4)
 	for i := 0; i < len(keys); i++ {
 		keys[i], _ = crypto.GenerateKey()
-		pool.currentState.AddBalance(crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(1000000))
+		testAddBalance(pool, crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(1000000))
 	}
 	// Generate and queue a batch of transactions, both pending and queued
 	txs := types.Transactions{}
@@ -1397,8 +1451,135 @@ func TestTransactionPoolRepricing(t *testing.T) {
 	}
 }
 
+// Tests that setting the transaction pool gas price to a higher value correctly
+// discards everything cheaper (legacy & dynamic fee) than that and moves any
+// gapped transactions back from the pending pool to the queue.
+//
+// Note, local transactions are never allowed to be dropped.
+func TestTransactionPoolRepricingDynamicFee(t *testing.T) {
+	t.Parallel()
+
+	// Create the pool to test the pricing enforcement with
+	pool, _ := setupTxPoolWithConfig(eip1559Config)
+	defer pool.Stop()
+
+	// Keep track of transaction events to ensure all executables get announced
+	events := make(chan NewTxsEvent, 32)
+	sub := pool.txFeed.Subscribe(events)
+	defer sub.Unsubscribe()
+
+	// Create a number of test accounts and fund them
+	keys := make([]*ecdsa.PrivateKey, 4)
+	for i := 0; i < len(keys); i++ {
+		keys[i], _ = crypto.GenerateKey()
+		testAddBalance(pool, crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(1000000))
+	}
+	// Generate and queue a batch of transactions, both pending and queued
+	txs := types.Transactions{}
+
+	txs = append(txs, pricedTransaction(0, 100000, big.NewInt(2), keys[0]))
+	txs = append(txs, pricedTransaction(1, 100000, big.NewInt(1), keys[0]))
+	txs = append(txs, pricedTransaction(2, 100000, big.NewInt(2), keys[0]))
+
+	txs = append(txs, dynamicFeeTx(0, 100000, big.NewInt(2), big.NewInt(1), keys[1]))
+	txs = append(txs, dynamicFeeTx(1, 100000, big.NewInt(3), big.NewInt(2), keys[1]))
+	txs = append(txs, dynamicFeeTx(2, 100000, big.NewInt(3), big.NewInt(2), keys[1]))
+
+	txs = append(txs, dynamicFeeTx(1, 100000, big.NewInt(2), big.NewInt(2), keys[2]))
+	txs = append(txs, dynamicFeeTx(2, 100000, big.NewInt(1), big.NewInt(1), keys[2]))
+	txs = append(txs, dynamicFeeTx(3, 100000, big.NewInt(2), big.NewInt(2), keys[2]))
+
+	ltx := dynamicFeeTx(0, 100000, big.NewInt(2), big.NewInt(1), keys[3])
+
+	// Import the batch and that both pending and queued transactions match up
+	pool.AddRemotesSync(txs)
+	pool.AddLocal(ltx)
+
+	pending, queued := pool.Stats()
+	if pending != 7 {
+		t.Fatalf("pending transactions mismatched: have %d, want %d", pending, 7)
+	}
+	if queued != 3 {
+		t.Fatalf("queued transactions mismatched: have %d, want %d", queued, 3)
+	}
+	if err := validateEvents(events, 7); err != nil {
+		t.Fatalf("original event firing failed: %v", err)
+	}
+	if err := validateTxPoolInternals(pool); err != nil {
+		t.Fatalf("pool internal state corrupted: %v", err)
+	}
+	// Reprice the pool and check that underpriced transactions get dropped
+	pool.SetGasPrice(big.NewInt(2))
+
+	pending, queued = pool.Stats()
+	if pending != 2 {
+		t.Fatalf("pending transactions mismatched: have %d, want %d", pending, 2)
+	}
+	if queued != 5 {
+		t.Fatalf("queued transactions mismatched: have %d, want %d", queued, 5)
+	}
+	if err := validateEvents(events, 0); err != nil {
+		t.Fatalf("reprice event firing failed: %v", err)
+	}
+	if err := validateTxPoolInternals(pool); err != nil {
+		t.Fatalf("pool internal state corrupted: %v", err)
+	}
+	// Check that we can't add the old transactions back
+	tx := pricedTransaction(1, 100000, big.NewInt(1), keys[0])
+	if err := pool.AddRemote(tx); err != ErrUnderpriced {
+		t.Fatalf("adding underpriced pending transaction error mismatch: have %v, want %v", err, ErrUnderpriced)
+	}
+	tx = dynamicFeeTx(0, 100000, big.NewInt(2), big.NewInt(1), keys[1])
+	if err := pool.AddRemote(tx); err != ErrUnderpriced {
+		t.Fatalf("adding underpriced pending transaction error mismatch: have %v, want %v", err, ErrUnderpriced)
+	}
+	tx = dynamicFeeTx(2, 100000, big.NewInt(1), big.NewInt(1), keys[2])
+	if err := pool.AddRemote(tx); err != ErrUnderpriced {
+		t.Fatalf("adding underpriced queued transaction error mismatch: have %v, want %v", err, ErrUnderpriced)
+	}
+	if err := validateEvents(events, 0); err != nil {
+		t.Fatalf("post-reprice event firing failed: %v", err)
+	}
+	if err := validateTxPoolInternals(pool); err != nil {
+		t.Fatalf("pool internal state corrupted: %v", err)
+	}
+	// However we can add local underpriced transactions
+	tx = dynamicFeeTx(1, 100000, big.NewInt(1), big.NewInt(1), keys[3])
+	if err := pool.AddLocal(tx); err != nil {
+		t.Fatalf("failed to add underpriced local transaction: %v", err)
+	}
+	if pending, _ = pool.Stats(); pending != 3 {
+		t.Fatalf("pending transactions mismatched: have %d, want %d", pending, 3)
+	}
+	if err := validateEvents(events, 1); err != nil {
+		t.Fatalf("post-reprice local event firing failed: %v", err)
+	}
+	if err := validateTxPoolInternals(pool); err != nil {
+		t.Fatalf("pool internal state corrupted: %v", err)
+	}
+	// And we can fill gaps with properly priced transactions
+	tx = pricedTransaction(1, 100000, big.NewInt(2), keys[0])
+	if err := pool.AddRemote(tx); err != nil {
+		t.Fatalf("failed to add pending transaction: %v", err)
+	}
+	tx = dynamicFeeTx(0, 100000, big.NewInt(3), big.NewInt(2), keys[1])
+	if err := pool.AddRemote(tx); err != nil {
+		t.Fatalf("failed to add pending transaction: %v", err)
+	}
+	tx = dynamicFeeTx(2, 100000, big.NewInt(2), big.NewInt(2), keys[2])
+	if err := pool.AddRemote(tx); err != nil {
+		t.Fatalf("failed to add queued transaction: %v", err)
+	}
+	if err := validateEvents(events, 5); err != nil {
+		t.Fatalf("post-reprice event firing failed: %v", err)
+	}
+	if err := validateTxPoolInternals(pool); err != nil {
+		t.Fatalf("pool internal state corrupted: %v", err)
+	}
+}
+
 // Tests that setting the transaction pool gas price to a higher value does not
-// remove local transactions.
+// remove local transactions (legacy & dynamic fee).
 func TestTransactionPoolRepricingKeepsLocals(t *testing.T) {
 	t.Parallel()
 
@@ -1407,30 +1588,42 @@ func TestTransactionPoolRepricingKeepsLocals(t *testing.T) {
 	statedb, _ := state.New(common.Hash{}, state.NewDatabase(db))
 	blockchain := &testBlockChain{statedb, 1000000, new(event.Feed)}
 
-	pool := NewTxPool(testTxPoolConfig, params.TestChainConfig, blockchain)
+	pool := NewTxPool(testTxPoolConfig, eip1559Config, blockchain)
 	defer pool.Stop()
 
 	// Create a number of test accounts and fund them
 	keys := make([]*ecdsa.PrivateKey, 3)
 	for i := 0; i < len(keys); i++ {
 		keys[i], _ = crypto.GenerateKey()
-		pool.currentState.AddBalance(crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(1000*1000000))
+		testAddBalance(pool, crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(1000*1000000))
 	}
 	// Create transaction (both pending and queued) with a linearly growing gasprice
+	// common.LimitThresholdNonceInQueue = 10
 	for i := uint64(0); i < 5; i++ {
-		// Add pending
-		p_tx := pricedTransaction(i, 100000, big.NewInt(int64(i+1)), keys[2])
-		if err := pool.AddLocal(p_tx); err != nil {
+		// Add pending transaction.
+		pendingTx := pricedTransaction(i, 100000, big.NewInt(int64(i+1)), keys[2])
+		if err := pool.AddLocal(pendingTx); err != nil {
 			t.Fatal(err)
 		}
-		// Add queued
-		q_tx := pricedTransaction(i+6, 100000, big.NewInt(int64(i+1)), keys[2])
-		if err := pool.AddLocal(q_tx); err != nil {
+		// Add queued transaction.
+		queuedTx := pricedTransaction(i+6, 100000, big.NewInt(int64(i+1)), keys[2])
+		if err := pool.AddLocal(queuedTx); err != nil {
+			t.Fatal(err)
+		}
+
+		// Add pending dynamic fee transaction.
+		pendingTx = dynamicFeeTx(i, 100000, big.NewInt(int64(i)+1), big.NewInt(int64(i)), keys[1])
+		if err := pool.AddLocal(pendingTx); err != nil {
+			t.Fatal(err)
+		}
+		// Add queued dynamic fee transaction.
+		queuedTx = dynamicFeeTx(i+6, 100000, big.NewInt(int64(i)+1), big.NewInt(int64(i)), keys[1])
+		if err := pool.AddLocal(queuedTx); err != nil {
 			t.Fatal(err)
 		}
 	}
 	pending, queued := pool.Stats()
-	expPending, expQueued := 5, 5
+	expPending, expQueued := 10, 10
 	validate := func() {
 		pending, queued = pool.Stats()
 		if pending != expPending {
@@ -1486,7 +1679,7 @@ func TestTransactionPoolUnderpricing(t *testing.T) {
 	keys := make([]*ecdsa.PrivateKey, 4)
 	for i := 0; i < len(keys); i++ {
 		keys[i], _ = crypto.GenerateKey()
-		pool.currentState.AddBalance(crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(1000000))
+		testAddBalance(pool, crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(1000000))
 	}
 	// Generate and queue a batch of transactions, both pending and queued
 	txs := types.Transactions{}
@@ -1594,7 +1787,7 @@ func TestTransactionPoolStableUnderpricing(t *testing.T) {
 	keys := make([]*ecdsa.PrivateKey, 2)
 	for i := 0; i < len(keys); i++ {
 		keys[i], _ = crypto.GenerateKey()
-		pool.currentState.AddBalance(crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(1000000))
+		testAddBalance(pool, crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(1000000))
 	}
 	// Fill up the entire queue with the same transaction price points
 	txs := types.Transactions{}
@@ -1635,6 +1828,173 @@ func TestTransactionPoolStableUnderpricing(t *testing.T) {
 	}
 }
 
+// Tests that when the pool reaches its global transaction limit, underpriced
+// transactions (legacy & dynamic fee) are gradually shifted out for more
+// expensive ones and any gapped pending transactions are moved into the queue.
+//
+// Note, local transactions are never allowed to be dropped.
+func TestTransactionPoolUnderpricingDynamicFee(t *testing.T) {
+	t.Parallel()
+
+	pool, _ := setupTxPoolWithConfig(eip1559Config)
+	defer pool.Stop()
+
+	pool.config.GlobalSlots = 2
+	pool.config.GlobalQueue = 2
+
+	// Keep track of transaction events to ensure all executables get announced
+	events := make(chan NewTxsEvent, 32)
+	sub := pool.txFeed.Subscribe(events)
+	defer sub.Unsubscribe()
+
+	// Create a number of test accounts and fund them
+	keys := make([]*ecdsa.PrivateKey, 4)
+	for i := 0; i < len(keys); i++ {
+		keys[i], _ = crypto.GenerateKey()
+		testAddBalance(pool, crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(1000000))
+	}
+
+	// Generate and queue a batch of transactions, both pending and queued
+	txs := types.Transactions{}
+
+	txs = append(txs, dynamicFeeTx(0, 100000, big.NewInt(3), big.NewInt(2), keys[0]))
+	txs = append(txs, pricedTransaction(1, 100000, big.NewInt(2), keys[0]))
+	txs = append(txs, dynamicFeeTx(1, 100000, big.NewInt(2), big.NewInt(1), keys[1]))
+
+	ltx := dynamicFeeTx(0, 100000, big.NewInt(2), big.NewInt(1), keys[2])
+
+	// Import the batch and that both pending and queued transactions match up
+	pool.AddRemotes(txs) // Pend K0:0, K0:1; Que K1:1
+	pool.AddLocal(ltx)   // +K2:0 => Pend K0:0, K0:1, K2:0; Que K1:1
+
+	pending, queued := pool.Stats()
+	if pending != 3 {
+		t.Fatalf("pending transactions mismatched: have %d, want %d", pending, 3)
+	}
+	if queued != 1 {
+		t.Fatalf("queued transactions mismatched: have %d, want %d", queued, 1)
+	}
+	if err := validateEvents(events, 3); err != nil {
+		t.Fatalf("original event firing failed: %v", err)
+	}
+	if err := validateTxPoolInternals(pool); err != nil {
+		t.Fatalf("pool internal state corrupted: %v", err)
+	}
+
+	// Ensure that adding an underpriced transaction fails
+	tx := dynamicFeeTx(0, 100000, big.NewInt(2), big.NewInt(1), keys[1])
+	if err := pool.AddRemote(tx); err != ErrUnderpriced { // Pend K0:0, K0:1, K2:0; Que K1:1
+		t.Fatalf("adding underpriced pending transaction error mismatch: have %v, want %v", err, ErrUnderpriced)
+	}
+
+	// Ensure that adding high priced transactions drops cheap ones, but not own
+	tx = pricedTransaction(0, 100000, big.NewInt(2), keys[1])
+	if err := pool.AddRemote(tx); err != nil { // +K1:0, -K1:1 => Pend K0:0, K0:1, K1:0, K2:0; Que -
+		t.Fatalf("failed to add well priced transaction: %v", err)
+	}
+
+	tx = pricedTransaction(2, 100000, big.NewInt(3), keys[1])
+	if err := pool.AddRemote(tx); err != nil { // +K1:2, -K0:1 => Pend K0:0 K1:0, K2:0; Que K1:2
+		t.Fatalf("failed to add well priced transaction: %v", err)
+	}
+	tx = dynamicFeeTx(3, 100000, big.NewInt(4), big.NewInt(1), keys[1])
+	if err := pool.AddRemote(tx); err != nil { // +K1:3, -K1:0 => Pend K0:0 K2:0; Que K1:2 K1:3
+		t.Fatalf("failed to add well priced transaction: %v", err)
+	}
+	pending, queued = pool.Stats()
+	if pending != 2 {
+		t.Fatalf("pending transactions mismatched: have %d, want %d", pending, 2)
+	}
+	if queued != 2 {
+		t.Fatalf("queued transactions mismatched: have %d, want %d", queued, 2)
+	}
+	if err := validateEvents(events, 1); err != nil {
+		t.Fatalf("additional event firing failed: %v", err)
+	}
+	if err := validateTxPoolInternals(pool); err != nil {
+		t.Fatalf("pool internal state corrupted: %v", err)
+	}
+	// Ensure that adding local transactions can push out even higher priced ones
+	ltx = dynamicFeeTx(1, 100000, big.NewInt(1), big.NewInt(0), keys[2])
+	if err := pool.AddLocal(ltx); err != nil {
+		t.Fatalf("failed to append underpriced local transaction: %v", err)
+	}
+	ltx = dynamicFeeTx(0, 100000, big.NewInt(1), big.NewInt(0), keys[3])
+	if err := pool.AddLocal(ltx); err != nil {
+		t.Fatalf("failed to add new underpriced local transaction: %v", err)
+	}
+	pending, queued = pool.Stats()
+	if pending != 3 {
+		t.Fatalf("pending transactions mismatched: have %d, want %d", pending, 3)
+	}
+	if queued != 1 {
+		t.Fatalf("queued transactions mismatched: have %d, want %d", queued, 1)
+	}
+	if err := validateEvents(events, 2); err != nil {
+		t.Fatalf("local event firing failed: %v", err)
+	}
+	if err := validateTxPoolInternals(pool); err != nil {
+		t.Fatalf("pool internal state corrupted: %v", err)
+	}
+}
+
+// Tests whether highest fee cap transaction is retained after a batch of high effective
+// tip transactions are added and vice versa
+func TestDualHeapEviction(t *testing.T) {
+	t.Parallel()
+
+	pool, _ := setupTxPoolWithConfig(eip1559Config)
+	defer pool.Stop()
+
+	pool.config.GlobalSlots = 10
+	pool.config.GlobalQueue = 10
+
+	var (
+		highTip, highCap *types.Transaction
+		baseFee          int
+	)
+
+	check := func(tx *types.Transaction, name string) {
+		if pool.all.GetRemote(tx.Hash()) == nil {
+			t.Fatalf("highest %s transaction evicted from the pool", name)
+		}
+	}
+
+	add := func(urgent bool) {
+		txs := make([]*types.Transaction, 20)
+		for i := range txs {
+			// Create a test accounts and fund it
+			key, _ := crypto.GenerateKey()
+			testAddBalance(pool, crypto.PubkeyToAddress(key.PublicKey), big.NewInt(1000000000000))
+			if urgent {
+				txs[i] = dynamicFeeTx(0, 100000, big.NewInt(int64(baseFee+1+i)), big.NewInt(int64(1+i)), key)
+				highTip = txs[i]
+			} else {
+				txs[i] = dynamicFeeTx(0, 100000, big.NewInt(int64(baseFee+200+i)), big.NewInt(1), key)
+				highCap = txs[i]
+			}
+		}
+		pool.AddRemotes(txs)
+		pending, queued := pool.Stats()
+		if pending+queued != 20 {
+			t.Fatalf("transaction count mismatch: have %d, want %d", pending+queued, 20)
+		}
+	}
+
+	add(false)
+	for baseFee = 0; baseFee <= 1000; baseFee += 100 {
+		pool.priced.SetBaseFee(big.NewInt(int64(baseFee)))
+		add(true)
+		check(highCap, "fee cap")
+		add(false)
+		check(highTip, "effective tip")
+	}
+
+	if err := validateTxPoolInternals(pool); err != nil {
+		t.Fatalf("pool internal state corrupted: %v", err)
+	}
+}
+
 // Tests that the pool rejects duplicate transactions.
 func TestTransactionDeduplication(t *testing.T) {
 	t.Parallel()
@@ -1648,7 +2008,7 @@ func TestTransactionDeduplication(t *testing.T) {
 
 	// Create a test account to add transactions with
 	key, _ := crypto.GenerateKey()
-	pool.currentState.AddBalance(crypto.PubkeyToAddress(key.PublicKey), big.NewInt(1000000000))
+	testAddBalance(pool, crypto.PubkeyToAddress(key.PublicKey), big.NewInt(1000000000))
 
 	// Create a batch of transactions and add a few of them
 	txs := make([]*types.Transaction, common.LimitThresholdNonceInQueue)
@@ -1720,7 +2080,7 @@ func TestTransactionReplacement(t *testing.T) {
 
 	// Create a test account to add transactions with
 	key, _ := crypto.GenerateKey()
-	pool.currentState.AddBalance(crypto.PubkeyToAddress(key.PublicKey), big.NewInt(1000000000))
+	testAddBalance(pool, crypto.PubkeyToAddress(key.PublicKey), big.NewInt(1000000000))
 
 	// Add pending transactions, ensuring the minimum price bump is enforced for replacement (for ultra low prices too)
 	price := int64(100)
@@ -1781,6 +2141,116 @@ func TestTransactionReplacement(t *testing.T) {
 	}
 }
 
+// Tests that the pool rejects replacement dynamic fee transactions that don't
+// meet the minimum price bump required.
+func TestTransactionReplacementDynamicFee(t *testing.T) {
+	t.Parallel()
+
+	// Create the pool to test the pricing enforcement with
+	pool, key := setupTxPoolWithConfig(eip1559Config)
+	defer pool.Stop()
+	testAddBalance(pool, crypto.PubkeyToAddress(key.PublicKey), big.NewInt(1000000000))
+
+	// Keep track of transaction events to ensure all executables get announced
+	events := make(chan NewTxsEvent, 32)
+	sub := pool.txFeed.Subscribe(events)
+	defer sub.Unsubscribe()
+
+	// Add pending transactions, ensuring the minimum price bump is enforced for replacement (for ultra low prices too)
+	feeCap := int64(100)
+	feeCapThreshold := (feeCap * (100 + int64(testTxPoolConfig.PriceBump))) / 100
+	tip := int64(60)
+	tipThreshold := (tip * (100 + int64(testTxPoolConfig.PriceBump))) / 100
+
+	// Run the following identical checks for both the pending and queue pools:
+	//	1.  Send initial tx => accept
+	//	2.  Don't bump tip or fee cap => discard
+	//	3.  Bump both more than min => accept
+	//	4.  Check events match expected (2 new executable txs during pending, 0 during queue)
+	//	5.  Send new tx with larger tip and feeCap => accept
+	//	6.  Bump tip max allowed so it's still underpriced => discard
+	//	7.  Bump fee cap max allowed so it's still underpriced => discard
+	//	8.  Bump tip min for acceptance => discard
+	//	9.  Bump feecap min for acceptance => discard
+	//	10. Bump feecap and tip min for acceptance => accept
+	//	11. Check events match expected (2 new executable txs during pending, 0 during queue)
+	stages := []string{"pending", "queued"}
+	for _, stage := range stages {
+		// Since state is empty, 0 nonce txs are "executable" and can go
+		// into pending immediately. 2 nonce txs are "happed
+		nonce := uint64(0)
+		if stage == "queued" {
+			nonce = 2
+		}
+
+		// 1.  Send initial tx => accept
+		tx := dynamicFeeTx(nonce, 100000, big.NewInt(2), big.NewInt(1), key)
+		if err := pool.addRemoteSync(tx); err != nil {
+			t.Fatalf("failed to add original cheap %s transaction: %v", stage, err)
+		}
+		// 2.  Don't bump tip or feecap => discard
+		tx = dynamicFeeTx(nonce, 100001, big.NewInt(2), big.NewInt(1), key)
+		if err := pool.AddRemote(tx); err != ErrReplaceUnderpriced {
+			t.Fatalf("original cheap %s transaction replacement error mismatch: have %v, want %v", stage, err, ErrReplaceUnderpriced)
+		}
+		// 3.  Bump both more than min => accept
+		tx = dynamicFeeTx(nonce, 100000, big.NewInt(3), big.NewInt(2), key)
+		if err := pool.AddRemote(tx); err != nil {
+			t.Fatalf("failed to replace original cheap %s transaction: %v", stage, err)
+		}
+		// 4.  Check events match expected (2 new executable txs during pending, 0 during queue)
+		count := 2
+		if stage == "queued" {
+			count = 0
+		}
+		if err := validateEvents(events, count); err != nil {
+			t.Fatalf("cheap %s replacement event firing failed: %v", stage, err)
+		}
+		// 5.  Send new tx with larger tip and feeCap => accept
+		tx = dynamicFeeTx(nonce, 100000, big.NewInt(feeCap), big.NewInt(tip), key)
+		if err := pool.addRemoteSync(tx); err != nil {
+			t.Fatalf("failed to add original proper %s transaction: %v", stage, err)
+		}
+		// 6.  Bump tip max allowed so it's still underpriced => discard
+		tx = dynamicFeeTx(nonce, 100000, big.NewInt(feeCap), big.NewInt(tipThreshold-1), key)
+		if err := pool.AddRemote(tx); err != ErrReplaceUnderpriced {
+			t.Fatalf("original proper %s transaction replacement error mismatch: have %v, want %v", stage, err, ErrReplaceUnderpriced)
+		}
+		// 7.  Bump fee cap max allowed so it's still underpriced => discard
+		tx = dynamicFeeTx(nonce, 100000, big.NewInt(feeCapThreshold-1), big.NewInt(tip), key)
+		if err := pool.AddRemote(tx); err != ErrReplaceUnderpriced {
+			t.Fatalf("original proper %s transaction replacement error mismatch: have %v, want %v", stage, err, ErrReplaceUnderpriced)
+		}
+		// 8.  Bump tip min for acceptance => accept
+		tx = dynamicFeeTx(nonce, 100000, big.NewInt(feeCap), big.NewInt(tipThreshold), key)
+		if err := pool.AddRemote(tx); err != ErrReplaceUnderpriced {
+			t.Fatalf("original proper %s transaction replacement error mismatch: have %v, want %v", stage, err, ErrReplaceUnderpriced)
+		}
+		// 9.  Bump fee cap min for acceptance => accept
+		tx = dynamicFeeTx(nonce, 100000, big.NewInt(feeCapThreshold), big.NewInt(tip), key)
+		if err := pool.AddRemote(tx); err != ErrReplaceUnderpriced {
+			t.Fatalf("original proper %s transaction replacement error mismatch: have %v, want %v", stage, err, ErrReplaceUnderpriced)
+		}
+		// 10. Check events match expected (3 new executable txs during pending, 0 during queue)
+		tx = dynamicFeeTx(nonce, 100000, big.NewInt(feeCapThreshold), big.NewInt(tipThreshold), key)
+		if err := pool.AddRemote(tx); err != nil {
+			t.Fatalf("failed to replace original cheap %s transaction: %v", stage, err)
+		}
+		// 11. Check events match expected (3 new executable txs during pending, 0 during queue)
+		count = 2
+		if stage == "queued" {
+			count = 0
+		}
+		if err := validateEvents(events, count); err != nil {
+			t.Fatalf("replacement %s event firing failed: %v", stage, err)
+		}
+	}
+
+	if err := validateTxPoolInternals(pool); err != nil {
+		t.Fatalf("pool internal state corrupted: %v", err)
+	}
+}
+
 // Tests that local transactions are journaled to disk, but remote transactions
 // get discarded between restarts.
 func TestTransactionJournaling(t *testing.T)         { testTransactionJournaling(t, false) }
@@ -1817,8 +2287,8 @@ func testTransactionJournaling(t *testing.T, nolocals bool) {
 	local, _ := crypto.GenerateKey()
 	remote, _ := crypto.GenerateKey()
 
-	pool.currentState.AddBalance(crypto.PubkeyToAddress(local.PublicKey), big.NewInt(1000000000))
-	pool.currentState.AddBalance(crypto.PubkeyToAddress(remote.PublicKey), big.NewInt(1000000000))
+	testAddBalance(pool, crypto.PubkeyToAddress(local.PublicKey), big.NewInt(1000000000))
+	testAddBalance(pool, crypto.PubkeyToAddress(remote.PublicKey), big.NewInt(1000000000))
 
 	// Add three local and a remote transactions and ensure they are queued up
 	if err := pool.AddLocal(pricedTransaction(0, 100000, big.NewInt(1), local)); err != nil {
@@ -1912,7 +2382,7 @@ func TestTransactionStatusCheck(t *testing.T) {
 	keys := make([]*ecdsa.PrivateKey, 3)
 	for i := 0; i < len(keys); i++ {
 		keys[i], _ = crypto.GenerateKey()
-		pool.currentState.AddBalance(crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(1000000))
+		testAddBalance(pool, crypto.PubkeyToAddress(keys[i].PublicKey), big.NewInt(1000000))
 	}
 	// Generate and queue a batch of transactions, both pending and queued
 	txs := types.Transactions{}
@@ -1982,7 +2452,7 @@ func benchmarkPendingDemotion(b *testing.B, size int) {
 	defer pool.Stop()
 
 	account := crypto.PubkeyToAddress(key.PublicKey)
-	pool.currentState.AddBalance(account, big.NewInt(1000000))
+	testAddBalance(pool, account, big.NewInt(1000000))
 
 	for i := 0; i < size; i++ {
 		tx := transaction(uint64(i), 100000, key)
@@ -2007,7 +2477,7 @@ func benchmarkFuturePromotion(b *testing.B, size int) {
 	defer pool.Stop()
 
 	account := crypto.PubkeyToAddress(key.PublicKey)
-	pool.currentState.AddBalance(account, big.NewInt(1000000))
+	testAddBalance(pool, account, big.NewInt(1000000))
 
 	for i := 0; i < size; i++ {
 		tx := transaction(uint64(1+i), 100000, key)
@@ -2035,7 +2505,7 @@ func benchmarkPoolBatchInsert(b *testing.B, size int, local bool) {
 	defer pool.Stop()
 
 	account := crypto.PubkeyToAddress(key.PublicKey)
-	pool.currentState.AddBalance(account, big.NewInt(1000000))
+	testAddBalance(pool, account, big.NewInt(1000000))
 
 	batches := make([]types.Transactions, b.N)
 	for i := 0; i < b.N; i++ {
@@ -2076,13 +2546,13 @@ func BenchmarkInsertRemoteWithAllLocals(b *testing.B) {
 	for i := 0; i < b.N; i++ {
 		b.StopTimer()
 		pool, _ := setupTxPool()
-		pool.currentState.AddBalance(account, big.NewInt(100000000))
+		testAddBalance(pool, account, big.NewInt(100000000))
 		for _, local := range locals {
 			pool.AddLocal(local)
 		}
 		b.StartTimer()
 		// Assign a high enough balance for testing
-		pool.currentState.AddBalance(remoteAddr, big.NewInt(100000000))
+		testAddBalance(pool, remoteAddr, big.NewInt(100000000))
 		for i := 0; i < len(remotes); i++ {
 			pool.AddRemotes([]*types.Transaction{remotes[i]})
 		}
diff --git a/core/types/transaction.go b/core/types/transaction.go
index f188bb5dff63..a944cc4c858f 100644
--- a/core/types/transaction.go
+++ b/core/types/transaction.go
@@ -321,33 +321,67 @@ func (tx *Transaction) From() *common.Address {
 	return &from
 }
 
+// Cost returns gas * gasPrice + value.
+func (tx *Transaction) Cost() *big.Int {
+	total := new(big.Int).Mul(tx.GasPrice(), new(big.Int).SetUint64(tx.Gas()))
+	total.Add(total, tx.Value())
+	return total
+}
+
+// RawSignatureValues returns the V, R, S signature values of the transaction.
+// The return values should not be modified by the caller.
+func (tx *Transaction) RawSignatureValues() (v, r, s *big.Int) {
+	return tx.inner.rawSignatureValues()
+}
+
+// FeeCapCmp compares the fee cap of two transactions.
+func (tx *Transaction) FeeCapCmp(other *Transaction) int {
+	return tx.inner.feeCap().Cmp(other.inner.feeCap())
+}
+
+// FeeCapIntCmp compares the fee cap of the transaction against the given fee cap.
+func (tx *Transaction) FeeCapIntCmp(other *big.Int) int {
+	return tx.inner.feeCap().Cmp(other)
+}
+
+// TipCmp compares the tip of two transactions.
+func (tx *Transaction) TipCmp(other *Transaction) int {
+	return tx.inner.tip().Cmp(other.inner.tip())
+}
+
+// TipIntCmp compares the tip of the transaction against the given tip.
+func (tx *Transaction) TipIntCmp(other *big.Int) int {
+	return tx.inner.tip().Cmp(other)
+}
+
 // EffectiveTip returns the effective miner tip for the given base fee.
-// Returns error in case of a negative effective miner tip.
+// Note: if the effective tip is negative, this method returns both error
+// the actual negative value, _and_ ErrFeeCapTooLow
 func (tx *Transaction) EffectiveTip(baseFee *big.Int) (*big.Int, error) {
 	if baseFee == nil {
 		return tx.Tip(), nil
 	}
+	var err error
 	feeCap := tx.FeeCap()
 	if feeCap.Cmp(baseFee) == -1 {
-		return nil, ErrFeeCapTooLow
+		err = ErrFeeCapTooLow
 	}
-	return math.BigMin(tx.Tip(), feeCap.Sub(feeCap, baseFee)), nil
-}
-
-// RawSignatureValues returns the V, R, S signature values of the transaction.
-// The return values should not be modified by the caller.
-func (tx *Transaction) RawSignatureValues() (v, r, s *big.Int) {
-	return tx.inner.rawSignatureValues()
+	return math.BigMin(tx.Tip(), feeCap.Sub(feeCap, baseFee)), err
 }
 
-// GasPriceCmp compares the gas prices of two transactions.
-func (tx *Transaction) GasPriceCmp(other *Transaction) int {
-	return tx.inner.gasPrice().Cmp(other.inner.gasPrice())
+// EffectiveTipValue is identical to EffectiveTip, but does not return an
+// error in case the effective tip is negative
+func (tx *Transaction) EffectiveTipValue(baseFee *big.Int) *big.Int {
+	effectiveTip, _ := tx.EffectiveTip(baseFee)
+	return effectiveTip
 }
 
-// GasPriceIntCmp compares the gas price of the transaction against the given price.
-func (tx *Transaction) GasPriceIntCmp(other *big.Int) int {
-	return tx.inner.gasPrice().Cmp(other)
+// EffectiveTipCmp compares the effective tip of two transactions assuming the given base fee.
+func (tx *Transaction) EffectiveTipCmp(other *Transaction, baseFee *big.Int) int {
+	if baseFee == nil {
+		return tx.TipCmp(other)
+	}
+	return tx.EffectiveTipValue(baseFee).Cmp(other.EffectiveTipValue(baseFee))
 }
 
 // Hash returns the transaction hash.
@@ -427,13 +461,6 @@ func (tx *Transaction) WithSignature(signer Signer, sig []byte) (*Transaction, e
 	return &Transaction{inner: cpy, time: tx.time}, nil
 }
 
-// Cost returns gas * gasPrice + value.
-func (tx *Transaction) Cost() *big.Int {
-	total := new(big.Int).Mul(tx.GasPrice(), new(big.Int).SetUint64(tx.Gas()))
-	total.Add(total, tx.Value())
-	return total
-}
-
 // TxCost returns gas * gasPrice + value.
 func (tx *Transaction) TxCost(number *big.Int) *big.Int {
 	total := new(big.Int).Mul(common.GetGasPrice(number), new(big.Int).SetUint64(tx.Gas()))
diff --git a/eth/gasprice/gasprice.go b/eth/gasprice/gasprice.go
index fe3a4b511126..e860e9a69f91 100644
--- a/eth/gasprice/gasprice.go
+++ b/eth/gasprice/gasprice.go
@@ -194,7 +194,7 @@ type transactionsByGasPrice []*types.Transaction
 
 func (t transactionsByGasPrice) Len() int           { return len(t) }
 func (t transactionsByGasPrice) Swap(i, j int)      { t[i], t[j] = t[j], t[i] }
-func (t transactionsByGasPrice) Less(i, j int) bool { return t[i].GasPriceCmp(t[j]) < 0 }
+func (t transactionsByGasPrice) Less(i, j int) bool { return t[i].FeeCapCmp(t[j]) < 0 }
 
 // getBlockPrices calculates the lowest transaction gas price in a given block
 // and sends it to the result channel. If the block is empty or all transactions