In a groundbreaking move, Flare has introduced a governance proposal that would make it a pioneer among layer-1 blockchains in capturing maximal extractable value (MEV) at the protocol level. This approach would redirect MEV revenue from a select group of specialized actors to the protocol's own token economics. MEV refers to the revenue generated by block builders through reordering, inserting, or censoring transactions within a block, which is typically siphoned off by external searchers and builders, imposing a hidden tax on ordinary users.

Estimates suggest that MEV revenues can reach tens of millions of dollars on networks like Arbitrum, over $500 million on Ethereum, and up to $1 billion on Solana. Flare's proposal is divided into three stages, with the first stage transferring block building from individual validators to a designated builder operated by the Flare Entity, and a fallback to the current model if the builder becomes unavailable.

The second stage would move block building to Flare Confidential Compute, making the process publicly auditable, while the third stage would merge the builder and proposer into a single entity, transitioning existing validators to a verification role. The proposal also 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, including a reduction in annual FLR inflation from 5% to 3%, and a decrease in the hard cap from 5 billion to 3 billion tokens per year. Additionally, a 20-fold increase in the base gas fee, from 60 gwei to 1,200 gwei, is expected to raise the estimated annual FLR burn from approximately 7.5 million to 300 million at current transaction volumes. Notably, Flare has strong ties to the XRP ecosystem, having distributed its initial token supply through an airdrop to XRP holders in 2023, and its FAssets system has produced over 150 million FXRP, enabling smart contract functionality for assets on blockchains like XRPL that do not natively support it. As of late March 2026, the network reported over $160 million in total value locked, with more than 887,000 active addresses.