Flare has proposed a governance change that would make its FLR token one of the first layer 1 tokens to capture maximal extractable value (MEV) at the protocol level, redirecting it into token economics. The plan includes reducing annual FLR inflation from 5% to 3%, capping yearly inflation from 5 billion to 3 billion FLR, and establishing a new revenue framework called FIRE (Flare Income Reinvestment Entity).
The core shift moves block construction away from individual validators to a designated builder model. This aims to capture network-positive MEV, such as liquidations and arbitrage, and internalize value that typically goes to outside searchers. The long-term goal is to use this captured value for FLR buybacks, burns, and other ecosystem priorities through FIRE.
Flare frames this as a solution to a common blockchain problem where network usage doesn't always translate to token holder value. This next phase aims to tie activity across FAssets, Smart Accounts, and DeFi more directly to FLR economics.
The proposal follows a recent pickup in Flare's onchain activity, with over $160 million in total value locked (TVL) and more than 880,000 active addresses. If approved, Flare would also raise the base gas fee from 60 gwei to 1,200 gwei, potentially increasing the annual FLR burn significantly. Rewards would also shift more heavily towards P Chain staking, and a minimum 20% fee share would be introduced for network infrastructure supporters.
Flare's governance notice period runs from April 9 to April 16, with voting scheduled from April 17 to April 24.