Flare Network Seeks Tokenomic Overhaul with New Governance Proposal

Flare Network has introduced a governance proposal to reshape the tokenomics of its native FLR cryptocurrency. According to the plan, annual inflation would be reduced from 5% to 3%, effectively cutting issuance by 40%. This reduction in supply is expected to contribute to a more stable and sustainable token economy.

The proposal also introduces FIRE (Flare Income Reinvestment Entity), an entity responsible for managing revenue generated through MEV capture. MEV, or Maximum Extractable Value, refers to the profit that can be extracted from on-chain transactions, such as arbitrage and liquidation events. By capturing this value, Flare aims to channel it into buybacks, burns, and ecosystem funding.

The proposal shifts block building towards a protocol-controlled structure over time, aiming to reduce inefficiencies seen across many blockchain systems. The network plans to increase gas fees from 60 gwei to 1,200 gwei, which is expected to raise annual FLR burn levels from 7.5 million to 300 million tokens.

The proposal also includes a change in reward allocation towards P Chain staking participants and sets a minimum 20% fee share for infrastructure contributors. This structure aims to support entities maintaining network services and ensure a defined share of generated revenue flows to operators.