Flare Governance Proposal FIP.16 will open for voting on April 17, aiming to overhaul the token inflation rate and adjust the staking incentive mechanism.

ME News message: On April 14th (UTC+8), the XRP ecosystem DeFi project Flare governance proposal FIP.16 will open for voting on April 17th. The core goal is to transition the FLR token from inflationary to potentially deflationary by significantly reducing inflation, establishing an income reinvestment mechanism, and improving staking incentives, thereby enhancing the network’s long-term sustainability and security.

The proposal includes immediately lowering the annual inflation rate from 5% to 3% (a 40% reduction); establishing the Flare Income Reinvestment Entity (FIRE) to uniformly collect and redistribute network income (FDC fees, FAssets minting/redemption fees, FCC, MEV, etc.); significantly increasing the base-layer transaction fee (from 25 gwei to 500 gwei) to raise the amount of FLR burned, with an estimated ~300 million FLR burned annually; adjusting the staking incentive mechanism by prioritizing P-chain staking (with a weight 5 times that of C-chain delegations), raising the maximum stake limit for a single validator to 300 million FLR, and requiring that entities receive at least 20% of the fees. (Source: Foresight News)