Flare, a blockchain with ties to the XRP ecosystem, has proposed a significant protocol overhaul to capture maximal extractable value (MEV) and drastically reduce token inflation. The initiative aims to move MEV revenue from specialized actors to the protocol level.
The three-stage proposal reconfigures block building, eventually merging it with protocol functions for enhanced auditability. A newly created entity, FIRE (Flare Income Reinvestment Entity), will collect revenue from various protocol sources, including captured MEV, to conduct open-market buybacks and burns of FLR tokens.
Immediate changes upon approval include reducing annual FLR inflation from 5% to 3% and cutting the hard cap to 3 billion tokens per year. A substantial increase in the base gas fee is also projected to significantly boost FLR token burns, even as standard transaction costs remain minimal.