Just heard: Flare Networks is launching the vote on FIP.16 tomorrow – a pretty interesting governance proposal, in my opinion. It’s about reducing the annual inflation of the FLR token from currently 5% to 3%. That initially sounds like a classic deflationary story, but there’s more to it.

What’s special about this proposal is that Flare aims to capture MEV (Maximal Extractable Value) at the protocol level simultaneously. This is technically complex and shows that the developers are really working on optimizing the tokenomics. The revenue from this MEV capture will then be used for token buybacks and burns.

What does this mean in concrete terms? If this proposal passes, the supply of FLR could be reduced over time, which could theoretically put less pressure on the price. Given the current market conditions – with FLR trading at around $0.01 and a market cap of approximately $691M – such a structural change could indeed be significant.

The vote itself is an important moment for the Flare community. It shows that the network is actively working on its own optimization and isn’t simply accepting the status quo. Whether the holders will support the proposal, we’ll see tomorrow. In any case, it’s a point to keep an eye on if you’re involved in the Flare ecosystem.