diff --git a/evmd/app.go b/evmd/app.go
index fe494f779..687b3064a 100644
--- a/evmd/app.go
+++ b/evmd/app.go
@@ -32,6 +32,7 @@ import (
 	"github.com/cosmos/evm/x/feemarket"
 	feemarketkeeper "github.com/cosmos/evm/x/feemarket/keeper"
 	feemarkettypes "github.com/cosmos/evm/x/feemarket/types"
+
 	// NOTE: override ICS20 keeper to support IBC transfers of ERC20 tokens
 	"github.com/cosmos/evm/x/ibc/transfer"
 	transferkeeper "github.com/cosmos/evm/x/ibc/transfer/keeper"
diff --git a/rpc/backend/blocks.go b/rpc/backend/blocks.go
index 40b40a448..e9028c038 100644
--- a/rpc/backend/blocks.go
+++ b/rpc/backend/blocks.go
@@ -339,6 +339,37 @@ func (b *Backend) parseDerivedTxFromAdditionalFields(
 	ethMsg.From = additional.Sender.Hex()
 	return ethMsg
 }
+func (b *Backend) parseDerivedTxFromAdditionalFieldsForTrace(
+	additional *rpctypes.TxResultAdditionalFields,
+) *evmtypes.MsgEthereumTx {
+	recipient := additional.Recipient
+
+	// for transactions before v31 this value was mistakenly used for Gas field
+	gas := additional.GasUsed
+	if additional.GasLimit != nil {
+		gas = *additional.GasLimit
+	}
+	t := ethtypes.NewTx(&ethtypes.LegacyTx{
+		Nonce:    additional.Nonce,
+		Data:     additional.Data,
+		Gas:      gas,
+		To:       &recipient,
+		GasPrice: nil,
+		Value:    additional.Value,
+		V:        big.NewInt(0),
+		R:        big.NewInt(0),
+		S:        big.NewInt(0),
+	})
+	ethMsg := &evmtypes.MsgEthereumTx{}
+	err := ethMsg.FromEthereumTx(t)
+	if err != nil {
+		b.logger.Error("can not create eth msg", err.Error())
+		return nil
+	}
+	ethMsg.Hash = additional.Hash.Hex()
+	ethMsg.From = additional.Sender.Hex()
+	return ethMsg
+}
 
 // gasForDerivedEthTx returns the gas value to use for a derived Ethereum transaction.
 //
diff --git a/rpc/backend/tracing.go b/rpc/backend/tracing.go
index 721bbde3a..f13222845 100644
--- a/rpc/backend/tracing.go
+++ b/rpc/backend/tracing.go
@@ -127,6 +127,7 @@ func (b *Backend) TraceTransaction(hash common.Hash, config *evmtypes.TraceConfi
 
 	// add predecessor messages in current cosmos tx
 	index := int(transaction.MsgIndex) // #nosec G115
+
 	for i := 0; i < index; i++ {
 		msg := tx.GetMsgs()[i]
 		// Check if it's a normal Ethereum tx
diff --git a/x/vm/keeper/state_transition.go b/x/vm/keeper/state_transition.go
index 665429a62..9c2e45d32 100644
--- a/x/vm/keeper/state_transition.go
+++ b/x/vm/keeper/state_transition.go
@@ -18,8 +18,10 @@ import (
 
 	errorsmod "cosmossdk.io/errors"
 	"cosmossdk.io/math"
+	sdkmath "cosmossdk.io/math"
 
 	sdk "github.com/cosmos/cosmos-sdk/types"
+	authtypes "github.com/cosmos/cosmos-sdk/x/auth/types"
 )
 
 // NewEVM generates a go-ethereum VM from the provided Message fields and the chain parameters
@@ -243,6 +245,30 @@ func (k *Keeper) ApplyTransaction(ctx sdk.Context, tx *ethtypes.Transaction) (*t
 	if err = k.RefundGas(ctx, msg, msg.Gas()-res.GasUsed, evmDenom); err != nil {
 		return nil, errorsmod.Wrapf(err, "failed to refund gas leftover gas to sender %s", msg.From())
 	}
+	// burn base fee (EIP-1559): baseFee * gasUsed
+	if cfg.BaseFee != nil && cfg.BaseFee.Sign() > 0 && res.GasUsed > 0 {
+		// compute amount = baseFee * gasUsed
+		burnAmt := new(big.Int).Mul(cfg.BaseFee, new(big.Int).SetUint64(res.GasUsed))
+
+		// create coin in EVM denom
+		burnCoin := sdk.Coin{Denom: types.GetEVMCoinDenom(), Amount: sdkmath.NewIntFromBigInt(burnAmt)}
+
+		// convert to extended denom (chain denom) and burn from fee collector
+		converted, err := types.ConvertEvmCoinDenomToExtendedDenom(burnCoin)
+		if err != nil {
+			// handle error (log and/or return). If you return, it may fail the tx; choose behavior.
+			k.Logger(ctx).Error("failed to convert evm denom for base fee burn", "err", err)
+		} else {
+			burnCoins := sdk.Coins{converted}
+			evmmodAddr := authtypes.NewModuleAddress(types.ModuleName)
+			if err := k.bankWrapper.SendCoinsFromModuleToAccount(ctx, authtypes.FeeCollectorName, evmmodAddr, burnCoins); err != nil {
+				k.Logger(ctx).Error("failed to move base fee to evm module account", "err", err)
+			} else if err := k.bankWrapper.BurnCoins(ctx, types.ModuleName, burnCoins); err != nil {
+				// handle error - either log or return error. Logging avoids failing block.
+				k.Logger(ctx).Error("failed to burn base fee from evm module account", "err", err)
+			}
+		}
+	}
 
 	if len(logs) > 0 {
 		// Update transient block bloom filter