And there’s another key thing: the MEV phase is still ahead.
Let’s look at this from first principles.
Once you have meaningful trading, lending and liquidations onchain, economic inefficiencies appear. Arbitrage, liquidations, and other opportunities create value that somebody will capture.
Ethereum built an entire block-building market around this. On Solana, MEV tips have become an important source of validator and staker revenue.
Flare is proposing something different.
Under FIP.16, approved forms of network-positive MEV would be captured at the block-building layer and directed into FIRE.
That changes the economic equation.
More FAssets liquidity, more lending, more swaps and more real economic activity can create more opportunities for value capture.
More captured value gives FIRE more resources to replace inflation-funded staking rewards, buy or burn FLR, and reinvest into liquidity and further economic activity.
If that revenue eventually becomes large enough, network security can increasingly be paid for by the economy Flare hosts rather than by issuing new FLR.
So what else do we need?
We need useful applications, deeper FAssets liquidity, active lending markets, more assets, more users, better trading infrastructure, and builders creating products people actually want to use.
The larger the real economy we build on Flare, the larger the economic base FIRE could eventually capture from.
Today made Flare’s economic design unusually easy to see.
FAssets brings assets like XRP into Flare’s programmable economy.
Firelight is building on top of that, using staked FXRP as protection capital for DeFi. Today it raised $8M to expand that model beyond XRP.
At the network layer, FDC, FAssets, Smart Accounts and FCC are all designed to generate fees from actual usage. Under FIP.16, portions of those revenues flow into FIRE, alongside future network-positive MEV capture.
FIRE’s mandate is then to use those network earnings to reduce inflation, buy or burn FLR, support staking and network security, and reinvest into further economic activity.
We are already starting to see the mechanics operate.
Around 20B FLR is now staked, up roughly 82% since March, while FIRE has accumulated about $29.4K, with nearly half of that revenue arriving in the second half of August. The absolute revenue is still small, but several of the revenue sources envisioned under FIP.16 are not fully live yet.
Flare is being designed so that more useful economic activity can eventually mean more value flowing back into the network that makes that activity possible.