In a bid to become a pioneer in layer-1 blockchains, Flare has unveiled a governance proposal that aims to capture maximal extractable value (MEV) at the protocol level. This move would divert MEV away from a select group of specialized actors who currently profit from transaction ordering on various major chains.

MEV refers to the revenue generated by block builders through reordering, inserting, or censoring transactions within a block, effectively imposing a hidden tax on ordinary users. On most blockchains, this value is seized by external searchers and builders, resulting in significant revenue, with estimates suggesting tens of millions of dollars on networks like Arbitrum, over $500 million on Ethereum, and up to $1 billion on Solana.

Flare's proposal would redirect this revenue into the protocol's token economics through a three-stage plan. The first stage involves transferring block building from individual validators to a designated builder operated by the Flare Entity, with a fallback option to the current model if the builder is unavailable. The second stage relocates block building to Flare Confidential Compute, making the process publicly auditable.

The final stage merges the builder and proposer into a single entity, shifting existing validators to a verification role. Furthermore, the proposal introduces FIRE, the Flare Income Reinvestment Entity, which would collect revenue from various protocol sources, including attestation fees, FAsset and Smart Account fees, confidential compute fees, and captured MEV. FIRE's primary objective is to decrease the FLR token supply through open-market buybacks and burns. Upon approval, several changes would take effect immediately.

The annual FLR inflation rate would drop to 3% from 5%, and the hard cap would be reduced to 3 billion tokens per year from 5 billion. A 20-fold increase in the base gas fee, from 60 gwei to 1,200 gwei, would lead to a significant rise in estimated annual FLR burn, from roughly 7.5 million to 300 million at current transaction volumes. Notably, even with this increase, a standard Flare transaction would cost only a fraction of a cent.

Flare has strong ties to the XRP ecosystem, having distributed its initial token supply through an airdrop to XRP holders in 2023. Its FAssets system has produced over 150 million FXRP, aiming to bring smart contract functionality to assets on blockchains like XRPL that do not natively support it.

As of late March 2026, the network boasts over $160 million in total value locked, with more than 887,000 active addresses.