April

DeFi

Time

Flare

Morpho

Flare has recorded a roughly 34% increase in staked FLR since July, taking the total to 21.5 billion tokens as its revised economic model cuts inflation and ties more network activity to token burns and protocol revenue.
<div id="cn-block-summary-block_50344d1a59df7d436506b45f5979ee7b" class="cn-block-summary">
 <div class="cn-block-summary__nav tabs">Summary
 </div>
 <div class="cn-block-summary__content">
 <ul>
 <li>Flare staking increased from about 16 billion to 21.5 billion FLR after the July upgrade.</li>
 <li>FIP.16 reduced annual FLR inflation from 5% to 3% and lowered its issuance ceiling.</li>
 <li>Transaction-fee burns have risen to more than 10 times their level before the network upgrade.</li>
 <li>FIRE has collected $31,438 from four revenue sources since it started operating in May.</li>
 </ul>
 </div>
</div>
<h2 class="wp-block-heading" id="flare-staking-has-increased-to-21-5-billion-flr">Flare staking has increased to 21.5 billion FLR</h2>
DefiLlama Research <a href="https://defillama.com/research/spotlight/flare-tokenomics-revamp-transition-activity-linked-economics" rel="noopener noreferrer nofollow">reported</a> on Sept. 4 that Flare’s tokenomics changes are producing measurable onchain results four months after the network approved FIP.16.
Staked FLR rose from approximately 16 billion in July to 21.5 billion, an increase of about 34%. The portion of all staked or delegated FLR held in staking climbed from roughly 32% in April to 46% by late August, with much of the increase occurring within weeks of the July 14 network upgrade.
Under FIP.16, FLR locked on Flare’s P-chain carries five times the signing weight of wrapped FLR delegated on its C-chain. Delegated tokens remain liquid and can be withdrawn at any time, while P-chain staking requires holders to lock their capital with a validator.
You might also like: <a href="https://crypto.news/flare-makes-xrpfi-accessible-in-a-single-signature-with-smart-accounts-v1-3/" rel="noopener noreferrer nofollow"> Flare makes XRPFi accessible in a single signature with smart accounts v1.3 </a>
Signing weight determines how much influence infrastructure providers have when producing blocks and operating Flare’s native data systems. Providers run the Flare Time Series Oracle, which supplies price feeds, and the Flare Data Connector, which verifies information from other blockchains and Web2 services.
Before FIP.16, different Flare protocols calculated voting weight in different ways. The revised system applies one calculation across FTSO anchor feeds, FDC, and block-latency feeds, with locked stake receiving the fivefold weighting.
Flare’s official <a href="https://proposals.flare.network/FIP/FIP_16.html" rel="noopener noreferrer nofollow">governance proposal</a> said the change was designed to put more influence behind committed capital and make the network’s core services equally costly to attack.
At the same time, the July upgrade raised the maximum stake per validator from 200 million to 300 million FLR. It also introduced a network-wide minimum delegation fee of 20%, replacing the previous minimum of zero.
Flare said the fee floor should prevent providers from competing through unsustainably low charges. Infrastructure providers must operate validators, collect data, maintain independent systems, and participate in governance, according to the proposal.
<h2 class="wp-block-heading" id="flare-tokenomics-changes-cut-inflation-and-raise-burns">Flare tokenomics changes cut inflation and raise burns</h2>
Annual FLR inflation fell from 5% to 3% on May 14, cutting the headline rate by 40%. The annual issuance ceiling also declined from 5 billion to 3 billion FLR.
With an inflatable supply of about 87 billion tokens, the 3% rate produces a gross yearly issuance of roughly 2.6 billion FLR, according to DefiLlama Research. Actual issuance may decrease over time because FIP.16 also changed, which balances count toward the calculation.
Permanently burned FLR, tokens held by the Flare Income Reinvestment Entity, and unearned rewards placed in certain penalty pools are excluded from the inflation base. As those balances increase, the amount subject to the 3% calculation becomes smaller.
Transaction burns accelerated after Flare implemented its Granite upgrade on July 14. Official <a href="https://github.com/flare-foundation/go-flare/blob/main/RELEASES-flare.md" rel="noopener noreferrer nofollow">network release notes</a> show that the minimum C-chain base fee increased from 25 gwei to 500 gwei.
All FLR paid as base transaction fees are permanently destroyed. Flare had burned 15.6 million FLR through transaction fees in 2026 by the time DefiLlama published its report, with more than 40% of the total burned following the July upgrade.
Consequently, the current burn pace sits at more than 10 times its pre-upgrade baseline. Usage determines the amount destroyed because every transaction removes FLR without requiring a new vote or a treasury decision.
Higher gas settings have not made simple transfers expensive in dollar terms. DefiLlama estimated that a basic transfer costs around 0.064 FLR, although transactions involving smart contracts may consume more gas.
Activity feeding the burn mechanism has also expanded through Flare’s FAssets system. In May, an <a href="https://crypto.news/flare-network-rallies-14percent-on-fassets-upgrade/" rel="noopener noreferrer nofollow">FAssets v1.3 upgrade</a> allowed users to mint FXRP from centralized exchanges such as Binance and Kraken through an XRP Ledger destination tag. FLR rose 14% on the day the upgrade went live, crypto.news reported at the time.
<h2 class="wp-block-heading" id="fire-has-started-collecting-network-revenue">FIRE has started collecting network revenue</h2>
FIP.16 created FIRE as a governed entity responsible for receiving revenue generated by Flare’s protocols. Its primary mandate permits the entity to reduce FLR supply through token burns and open-market purchases.
Secondary uses include supporting asset issuers, application yields, liquidity programs and the Flare Foundation’s network operations. Flare initially administers the entity through its foundation.
Four income sources are already active. FIRE receives all FAssets minting fees, 90% of FDC request fees, 10% of FAssets redemption fees, and FLR paid for FXRP destination-tag registrations.
Since collections began in May, FIRE has received assets worth $31,438, according to the DefiLlama report. FAssets minting provided $18,248 across 7,708 mints, making it the largest source.
FDC request fees contributed another $12,676 after collections from that service began on Aug. 18. Destination-tag registrations added $505, while FAssets redemption fees supplied $9.
Two sources pay FIRE in FLR, and two pay in FXRP. As a result, the pool’s reported dollar value changes with token prices as well as the volume of protocol activity.
FDC activity supports several services behind those revenue streams. Flare uses the connector to verify payments and events outside its network, including XRP Ledger transactions involved in creating FXRP.
A July update <a href="https://crypto.news/flare-makes-xrpfi-accessible-in-a-single-signature-with-smart-accounts-v1-3/" rel="noopener noreferrer nofollow">simplified FXRP access</a> by allowing users to mint the asset and enter selected vaults with one XRP Ledger signature. At the time, FXRP deployed in DeFi had increased from 82 million in February to 144 million, while users had created nearly 24,000 Flare Smart Accounts.
FIRE’s current receipts remain small compared with approximately 2.6 billion FLR in estimated gross annual issuance. Flare’s model therefore still relies mainly on reduced inflation and transaction burns rather than on enough protocol income to offset token creation.
Planned income from Flare Smart Accounts, Confidential Compute, and protocol-level maximal extractable value has yet to enter FIRE. Flare said its MEV system would capture value from permitted activities such as liquidations, atomic arbitrage, cross-chain arbitrage, and just-in-time liquidity.
According to Flare’s April explanation of FIP.16, its DeFi ecosystem processed more than 660,000 transactions involving cyclic-arbitrage structures and over 1,000 liquidation events during the first quarter of 2026. The company said the amount that FIRE could collect from MEV would depend on the volume and type of DeFi transactions processed by the network.
<h2 class="wp-block-heading" id="fxrp-activity-connects-flare-with-u-s-regulated-rlusd">FXRP activity connects Flare with U.S.-regulated RLUSD</h2>
FAssets give tokens from networks without smart-contract support a usable form on Flare. FXRP represents XRP within that system, allowing holders to place the asset in lending markets, liquidity pools, vaults, and other decentralized applications.
Flare said in April that more than 150 million FXRP was in circulation, with about 85% deployed across DeFi. At that point, the network had more than $160 million in total value locked under DefiLlama’s standard calculation and over 880,000 active addresses.
Part of that activity now reaches Ethereum. In August, FXRP received approval as collateral in Sentora’s RLUSD Main vault on Morpho, allowing holders to borrow Ripple’s dollar-backed stablecoin without selling their XRP exposure.
The <a href="https://crypto.news/xrp-defi-collateral-rlusd-flare-morpho/" rel="noopener noreferrer nofollow">RLUSD lending market</a> provides a relevant U.S. connection because Ripple received approval for the stablecoin from the New York Department of Financial Services in December 2024. Sentora reviewed FXRP’s liquidity, price behavior, oracle design and liquidation mechanics before accepting it as collateral.
Morpho uses isolated lending markets, limiting problems with one collateral asset to its specific pool rather than exposing every market in the protocol. Borrowers must deposit more FXRP than the value of RLUSD they receive, and liquidations depend on enough FXRP liquidity being available to repay lenders.
FIRE may move to joint community governance after its first year. Initiating the change requires support from holders representing at least 50% of Flare’s total inflatable FLR supply, after which the network would elect four representatives from infrastructure providers operating across Flare and Songbird.
Read more: <a href="https://crypto.news/solana-triples-transaction-capacity-with-v1-upgrade/" rel="noopener noreferrer nofollow"> Solana triples transaction capacity with v1 upgrade </a>

Flare tokenomics revamp drives staking to 21.5B FLR

Table of Contents

crypto.news

Other articles published on Sep 7, 2026

Join our free newsletter for daily crypto updates!