The Flare governance proposal FIP.16 will open for voting on April 17, aiming to restructure the token inflation rate and adjust the staking incentive mechanism.

Foresight News reports that the governance proposal FIP.16 for the XRP ecosystem DeFi project Flare will open for voting on April 17. The main objectives are to significantly reduce inflation, establish a revenue reinvestment mechanism, and enhance staking incentives, aiming to turn the FLR token from inflationary to potentially deflationary, thereby strengthening the network’s long-term sustainability and security.

The proposal includes immediately reducing the annual inflation rate from 5% to 3% (a 40% reduction); establishing the Flare Income Reinvestment Entity (FIRE) to centrally collect and redistribute network revenue (including FDC fees, FAssets minting/redemption fees, FCC, MEV, etc.); significantly increasing the base transaction fee (from 25 gwei to 500 gwei) to boost FLR burn rate, with an expected annual burn of about 300 million FLR; adjusting the staking incentive mechanism to primarily support P-chain staking (with a weighting five times that of C-chain delegation), raising the maximum single validator staking limit to 300 million FLR, and mandating that entities receive at least 20% of the fees.