Flare has published a governance proposal that would make FLR one of the first layer 1 tokens to capture maximal extractable value at the protocol level and redirect it into token economics.
The proposal would reduce annual FLR inflation from 5% to 3%, lower the yearly inflation cap from 5 billion to 3 billion FLR, and create a new revenue framework called FIRE, short for Flare Income Reinvestment Entity.
The core change is a shift toward protocol-owned block building. Under the proposal, Flare would gradually move block construction away from individual validators and into a designated builder model designed to capture network positive MEV, including liquidations, arbitrage, and liquidity provisioning.
The long-term goal is to internalize value that usually flows to outside searchers and redirect it toward FLR buybacks, burns, and other ecosystem priorities through FIRE.
Flare framed the proposal as an attempt to solve a tokenomics problem that many networks still struggle with. On most chains, usage does not always translate cleanly into value for token holders. Flare says the next phase of its model is designed to tie activity across FAssets, Smart Accounts, the Flare Data Connector, Flare Confidential Compute, and DeFi more directly to FLR economics.
The proposal arrives as Flare’s onchain activity has picked up. The network said it has more than $160 million in TVL, over 880,000 active addresses, and around 150 million FXRP minted, with more than 85% of that supply already deployed across DeFi use cases. Dune’s Flare dashboard currently shows TVL around $165 million.
Several measures would take effect quickly if the proposal is approved. In addition to the inflation cut, Flare would raise the base gas fee from 60 gwei to 1,200 gwei, a move the proposal says could lift annual FLR burn from about 7.5 million to roughly 300 million at current transaction volumes. It would also shift rewards more heavily toward P Chain staking and introduce a minimum 20% fee share for entities supporting network infrastructure.
Flare’s governance notice period runs from April 9 to April 16, with voting scheduled for April 17 through April 24.
