diff --git a/beacon/engine/gen_blockmetadata.go b/beacon/engine/gen_blockmetadata.go
index 3b0edb54939a..94df6bb786e8 100644
--- a/beacon/engine/gen_blockmetadata.go
+++ b/beacon/engine/gen_blockmetadata.go
@@ -5,7 +5,6 @@ package engine
 import (
 	"encoding/json"
 	"errors"
-	"math/big"
 
 	"github.com/ethereum/go-ethereum/common"
 	"github.com/ethereum/go-ethereum/common/hexutil"
@@ -16,13 +15,13 @@ var _ = (*blockMetadataMarshaling)(nil)
 // MarshalJSON marshals as JSON.
 func (b BlockMetadata) MarshalJSON() ([]byte, error) {
 	type BlockMetadata struct {
-		Beneficiary    common.Address `json:"beneficiary"  gencodec:"required"`
-		GasLimit       uint64         `json:"gasLimit"     gencodec:"required"`
-		Timestamp      hexutil.Uint64 `json:"timestamp"    gencodec:"required"`
-		MixHash        common.Hash    `json:"mixHash"      gencodec:"required"`
-		TxList         hexutil.Bytes  `json:"txList"          gencodec:"required"`
-		HighestBlockID *big.Int       `json:"highestBlockID"  gencodec:"required"`
-		ExtraData      []byte         `json:"extraData"       gencodec:"required"`
+		Beneficiary        common.Address `json:"beneficiary"  gencodec:"required"`
+		GasLimit           uint64         `json:"gasLimit"     gencodec:"required"`
+		Timestamp          hexutil.Uint64 `json:"timestamp"    gencodec:"required"`
+		MixHash            common.Hash    `json:"mixHash"      gencodec:"required"`
+		TxList             hexutil.Bytes  `json:"txList"          gencodec:"required"`
+		ExtraData          []byte         `json:"extraData"       gencodec:"required"`
+		BasefeeSharingPctg uint8          `json:"basefeeSharingPctg"`
 	}
 	var enc BlockMetadata
 	enc.Beneficiary = b.Beneficiary
@@ -30,21 +29,21 @@ func (b BlockMetadata) MarshalJSON() ([]byte, error) {
 	enc.Timestamp = hexutil.Uint64(b.Timestamp)
 	enc.MixHash = b.MixHash
 	enc.TxList = b.TxList
-	enc.HighestBlockID = b.HighestBlockID
 	enc.ExtraData = b.ExtraData
+	enc.BasefeeSharingPctg = b.BasefeeSharingPctg
 	return json.Marshal(&enc)
 }
 
 // UnmarshalJSON unmarshals from JSON.
 func (b *BlockMetadata) UnmarshalJSON(input []byte) error {
 	type BlockMetadata struct {
-		Beneficiary    *common.Address `json:"beneficiary"  gencodec:"required"`
-		GasLimit       *uint64         `json:"gasLimit"     gencodec:"required"`
-		Timestamp      *hexutil.Uint64 `json:"timestamp"    gencodec:"required"`
-		MixHash        *common.Hash    `json:"mixHash"      gencodec:"required"`
-		TxList         *hexutil.Bytes  `json:"txList"          gencodec:"required"`
-		HighestBlockID *big.Int        `json:"highestBlockID"  gencodec:"required"`
-		ExtraData      []byte          `json:"extraData"       gencodec:"required"`
+		Beneficiary        *common.Address `json:"beneficiary"  gencodec:"required"`
+		GasLimit           *uint64         `json:"gasLimit"     gencodec:"required"`
+		Timestamp          *hexutil.Uint64 `json:"timestamp"    gencodec:"required"`
+		MixHash            *common.Hash    `json:"mixHash"      gencodec:"required"`
+		TxList             *hexutil.Bytes  `json:"txList"          gencodec:"required"`
+		ExtraData          []byte          `json:"extraData"       gencodec:"required"`
+		BasefeeSharingPctg *uint8          `json:"basefeeSharingPctg"`
 	}
 	var dec BlockMetadata
 	if err := json.Unmarshal(input, &dec); err != nil {
@@ -70,13 +69,12 @@ func (b *BlockMetadata) UnmarshalJSON(input []byte) error {
 		return errors.New("missing required field 'txList' for BlockMetadata")
 	}
 	b.TxList = *dec.TxList
-	if dec.HighestBlockID == nil {
-		return errors.New("missing required field 'highestBlockID' for BlockMetadata")
-	}
-	b.HighestBlockID = dec.HighestBlockID
 	if dec.ExtraData == nil {
 		return errors.New("missing required field 'extraData' for BlockMetadata")
 	}
 	b.ExtraData = dec.ExtraData
+	if dec.BasefeeSharingPctg != nil {
+		b.BasefeeSharingPctg = *dec.BasefeeSharingPctg
+	}
 	return nil
 }
diff --git a/beacon/engine/types.go b/beacon/engine/types.go
index b246c7751500..2931e066c476 100644
--- a/beacon/engine/types.go
+++ b/beacon/engine/types.go
@@ -64,16 +64,15 @@ type payloadAttributesMarshaling struct {
 // CHANGE(taiko): BlockMetadata represents a `BlockMetadata` struct defined in
 // protocol.
 type BlockMetadata struct {
-	// Fields defined in `LibData.blockMetadata`.
 	Beneficiary common.Address `json:"beneficiary"  gencodec:"required"`
 	GasLimit    uint64         `json:"gasLimit"     gencodec:"required"`
 	Timestamp   uint64         `json:"timestamp"    gencodec:"required"`
 	MixHash     common.Hash    `json:"mixHash"      gencodec:"required"`
 
 	// Extra fields required in taiko-geth.
-	TxList         []byte   `json:"txList"          gencodec:"required"`
-	HighestBlockID *big.Int `json:"highestBlockID"  gencodec:"required"`
-	ExtraData      []byte   `json:"extraData"       gencodec:"required"`
+	TxList             []byte `json:"txList"          gencodec:"required"`
+	ExtraData          []byte `json:"extraData"       gencodec:"required"`
+	BasefeeSharingPctg uint8  `json:"basefeeSharingPctg"`
 }
 
 // CHANGE(taiko): JSON type overrides for BlockMetadata.
diff --git a/core/state/statedb.go b/core/state/statedb.go
index ebd2143882ac..0e2743944116 100644
--- a/core/state/statedb.go
+++ b/core/state/statedb.go
@@ -138,6 +138,10 @@ type StateDB struct {
 
 	// Testing hooks
 	onCommit func(states *triestate.Set) // Hook invoked when commit is performed
+
+	// CHANGE(taiko): basefeeSharingPctg of the basefee will be sent to the block.coinbase,
+	// the remaining will be sent to the treasury address.
+	BasefeeSharingPctg uint8
 }
 
 // New creates a new state from a given trie.
diff --git a/core/state_processor.go b/core/state_processor.go
index f953b1098680..40a9f53819cc 100644
--- a/core/state_processor.go
+++ b/core/state_processor.go
@@ -169,6 +169,8 @@ func ApplyTransaction(config *params.ChainConfig, bc ChainContext, author *commo
 	if err != nil {
 		return nil, err
 	}
+	// CHANGE(taiko): set `BasefeeSharingPctg` for the current message.
+	msg.BasefeeSharingPctg = statedb.BasefeeSharingPctg
 	// Create a new context to be used in the EVM environment
 	blockContext := NewEVMBlockContext(header, bc, author)
 	txContext := NewEVMTxContext(msg)
diff --git a/core/state_transition.go b/core/state_transition.go
index 031979784f9b..bce9bfbfa637 100644
--- a/core/state_transition.go
+++ b/core/state_transition.go
@@ -149,6 +149,9 @@ type Message struct {
 
 	// CHANGE(taiko): whether the current transaction is the first TaikoL2.anchor transaction in a block.
 	IsAnchor bool
+	// CHANGE(taiko): basefeeSharingPctg of the basefee will be sent to the block.coinbase,
+	// the remaining will be sent to the treasury address.
+	BasefeeSharingPctg uint8
 }
 
 // TransactionToMessage converts a transaction into a Message.
@@ -467,12 +470,16 @@ func (st *StateTransition) TransitionDb() (*ExecutionResult, error) {
 		fee := new(uint256.Int).SetUint64(st.gasUsed())
 		fee.Mul(fee, effectiveTipU256)
 		st.state.AddBalance(st.evm.Context.Coinbase, fee)
-		// CHANGE(taiko): basefee is not burnt, but sent to a treasury instead.
+		// CHANGE(taiko): basefee is not burnt, but sent to a treasury and block.coinbase instead.
 		if st.evm.ChainConfig().Taiko && st.evm.Context.BaseFee != nil && !st.msg.IsAnchor {
-			st.state.AddBalance(
-				st.getTreasuryAddress(),
-				uint256.MustFromBig(new(big.Int).Mul(st.evm.Context.BaseFee, new(big.Int).SetUint64(st.gasUsed()))),
+			totalFee := new(big.Int).Mul(st.evm.Context.BaseFee, new(big.Int).SetUint64(st.gasUsed()))
+			feeCoinbase := new(big.Int).Div(
+				new(big.Int).Mul(totalFee, new(big.Int).SetUint64(uint64(st.msg.BasefeeSharingPctg))),
+				new(big.Int).SetUint64(100),
 			)
+			feeTreasury := new(big.Int).Sub(totalFee, feeCoinbase)
+			st.state.AddBalance(st.getTreasuryAddress(), uint256.MustFromBig(feeTreasury))
+			st.state.AddBalance(st.evm.Context.Coinbase, uint256.MustFromBig(feeCoinbase))
 		}
 	}
 
diff --git a/eth/catalyst/api.go b/eth/catalyst/api.go
index c37cee4e02eb..0f44a8489ca8 100644
--- a/eth/catalyst/api.go
+++ b/eth/catalyst/api.go
@@ -382,6 +382,11 @@ func (api *ConsensusAPI) forkchoiceUpdated(update engine.ForkchoiceStateV1, payl
 	if payloadAttributes != nil {
 		// CHANGE(taiko): create a L2 block by Taiko protocol.
 		if isTaiko {
+			if payloadAttributes.BlockMetadata.BasefeeSharingPctg > 100 {
+				return valid(nil), engine.InvalidPayloadAttributes.With(
+					fmt.Errorf("invalid basefeeSharingPctg %d", payloadAttributes.BlockMetadata.BasefeeSharingPctg),
+				)
+			}
 			// No need to check payloadAttribute here, because all its fields are
 			// marked as required.
 			block, err := api.eth.Miner().SealBlockWith(
diff --git a/miner/taiko_worker.go b/miner/taiko_worker.go
index 3f02d21d174a..b050d7b77eb8 100644
--- a/miner/taiko_worker.go
+++ b/miner/taiko_worker.go
@@ -170,6 +170,7 @@ func (w *worker) sealBlockWith(
 	defer env.discard()
 
 	env.header.GasLimit = blkMeta.GasLimit
+	env.state.BasefeeSharingPctg = blkMeta.BasefeeSharingPctg
 
 	// Commit transactions.
 	gasLimit := env.header.GasLimit