Flare Proposes Protocol-Level MEV Capture and Inflation Reduction
- Flare’s governance proposal aims to capture maximal extractable value (MEV) at the protocol level, a first for layer-1 blockchains.
- Annual FLR inflation will decrease from 5% to 3%, with the hard cap reduced to 3 billion tokens per year.
- The base gas fee will increase from 60 gwei to 1,200 gwei, potentially raising annual FLR burn from 7.5 million to 300 million.
- Flare plans to establish the Flare Income Reinvestment Entity (FIRE) to manage revenue from various sources, including captured MEV.
- As of late March, Flare has over $160 million in total value locked and more than 887,000 active addresses.
This proposal seeks to redirect MEV revenues into Flare’s token economics while enhancing transparency through public auditing processes. The changes are designed to benefit users by reducing inflation and increasing token scarcity.
With these adjustments, Flare aims for a significant reduction in annual FLR inflation and an increase in token burn rates, aligning with its goal of improving overall network efficiency and user experience.
