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Flare Proposes Protocol-Level MEV Capture and 40% Inflation CutIn a significant governance proposal, Flare, the layer-1 blockchain known for its deep roots in the $XRP ecosystem, has laid out a plan to capture Maximal Extractable Value (MEV) at the protocol level. If approved, the move would redirect revenues away from specialized external actors and into the network's token economics, aiming to drastically reduce the native FLR supply. Capturing MEV: A Strategic Shift MEV is the revenue extracted by block builders from reordering, inserting, or censoring transactions within a block. On most major chains, this value is monopolized by a small group of specialized "searchers" and "builders." These external actors effectively impose a hidden tax on everyday users through front-running, sandwich attacks, and arbitrage. Estimates of annual MEV revenue on other networks underscore the potential scale. On Arbitrum, it is calculated in the tens of millions, while Ethereum can exceed $500 million, and Solana as much as $1 billion. Flare’s proposal would make it one of the first protocols to directly internalize this value. A Three-Stage Structural Overhaul The proposal details a three-stage redesign of the network's block-building process to facilitate MEV capture. Stage 1: Move block building from individual validators to a designated builder. The Flare Entity will initially run this builder, with a fallback system using the current model.Stage 2: Relocate block building to Flare Confidential Compute, making the entire process publicly auditable.Stage 3: Merge the builder and proposer roles into a single entity. The existing network validators will then transition exclusively to a verification role. The Rise of FIRE and Drastic Token Supply Reduction A key component of the plan is the creation of the Flare Income Reinvestment Entity (FIRE). FIRE will collect all protocol revenues, which, in addition to the newly captured MEV, include fees from: AttestationFAssetsSmart AccountsConfidential Compute FIRE’s singular mandate will be to reduce the total supply of the native FLR token through strategic open-market buybacks and subsequent token burns. Upon approval, several critical changes will take effect. Annual FLR inflation will be cut by 40%, dropping to 3% from the current 5%.The annual hard cap will be reduced to 3 billion tokens from 5 billion. Additionally, the proposal calls for a sharp increase in the base gas fee, raising it 20-fold from 60 gwei to 1,200 gwei. This increase is projected to boost the annual FLR burn from approximately 7.5 million tokens to over 300 million at current transaction volumes. Despite this significant gas fee increase, Flare transactions are expected to remain a fraction of a cent. Deep Ecosystem Integration Flare, a network with over $160 million in total value locked and 887,000 active addresses, holds a unique place in the crypto ecosystem. It launched in 2023 with an airdrop to XRP holders, and its FAssets system—which has already generated 150 million FXRP—is designed to provide smart contract functionality for blockchains that do not natively support it, most notably the XRPL. The network will vote on the proposed governance changes, which represent a bold attempt to rethink standard layer-1 revenue models and secure long-term sustainability through internalized value. Read for more 👇 [XRP vs. Bitcoin: The Quantum Threat Simplified](https://app.binance.com/uni-qr/cart/310982610792050?l=en&r=I3OFI50O&uc=web_square_share_link&uco=KLMXdH5PLJkexi9rQ6g1sw&us=copylink) $BTC $BNB #CZonTBPNInterview #xrp #IranHormuzCryptoFees #IranClosesHormuzAgain

Flare Proposes Protocol-Level MEV Capture and 40% Inflation Cut

In a significant governance proposal, Flare, the layer-1 blockchain known for its deep roots in the $XRP ecosystem, has laid out a plan to capture Maximal Extractable Value (MEV) at the protocol level. If approved, the move would redirect revenues away from specialized external actors and into the network's token economics, aiming to drastically reduce the native FLR supply.
Capturing MEV: A Strategic Shift
MEV is the revenue extracted by block builders from reordering, inserting, or censoring transactions within a block. On most major chains, this value is monopolized by a small group of specialized "searchers" and "builders." These external actors effectively impose a hidden tax on everyday users through front-running, sandwich attacks, and arbitrage.
Estimates of annual MEV revenue on other networks underscore the potential scale. On Arbitrum, it is calculated in the tens of millions, while Ethereum can exceed $500 million, and Solana as much as $1 billion. Flare’s proposal would make it one of the first protocols to directly internalize this value.
A Three-Stage Structural Overhaul
The proposal details a three-stage redesign of the network's block-building process to facilitate MEV capture.
Stage 1: Move block building from individual validators to a designated builder. The Flare Entity will initially run this builder, with a fallback system using the current model.Stage 2: Relocate block building to Flare Confidential Compute, making the entire process publicly auditable.Stage 3: Merge the builder and proposer roles into a single entity. The existing network validators will then transition exclusively to a verification role.
The Rise of FIRE and Drastic Token Supply Reduction
A key component of the plan is the creation of the Flare Income Reinvestment Entity (FIRE). FIRE will collect all protocol revenues, which, in addition to the newly captured MEV, include fees from:
AttestationFAssetsSmart AccountsConfidential Compute
FIRE’s singular mandate will be to reduce the total supply of the native FLR token through strategic open-market buybacks and subsequent token burns.
Upon approval, several critical changes will take effect.
Annual FLR inflation will be cut by 40%, dropping to 3% from the current 5%.The annual hard cap will be reduced to 3 billion tokens from 5 billion.
Additionally, the proposal calls for a sharp increase in the base gas fee, raising it 20-fold from 60 gwei to 1,200 gwei. This increase is projected to boost the annual FLR burn from approximately 7.5 million tokens to over 300 million at current transaction volumes.
Despite this significant gas fee increase, Flare transactions are expected to remain a fraction of a cent.
Deep Ecosystem Integration
Flare, a network with over $160 million in total value locked and 887,000 active addresses, holds a unique place in the crypto ecosystem. It launched in 2023 with an airdrop to XRP holders, and its FAssets system—which has already generated 150 million FXRP—is designed to provide smart contract functionality for blockchains that do not natively support it, most notably the XRPL.
The network will vote on the proposed governance changes, which represent a bold attempt to rethink standard layer-1 revenue models and secure long-term sustainability through internalized value.

Read for more
👇
XRP vs. Bitcoin: The Quantum Threat Simplified

$BTC $BNB

#CZonTBPNInterview #xrp #IranHormuzCryptoFees #IranClosesHormuzAgain

Hamidkakar

Flare Proposes Protocol-Level MEV Capture and 40% Inflation Cut

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