Flare has introduced a governance proposal that would make it a pioneer among layer-1 blockchains in capturing maximal extractable value at the protocol level. This move would redirect revenue from a limited number of specialized actors to the protocol itself, affecting transaction ordering across major chains. Maximal extractable value refers to the revenue block builders generate by reordering, inserting, or censoring transactions within a block, often resulting in a hidden tax on users through front-running, sandwich attacks, and arbitrage.
Estimates suggest that annual MEV revenues reach tens of millions of dollars on networks like Arbitrum, over $500 million on Ethereum, and up to $1 billion on Solana. The proposed three-stage plan would integrate this revenue into Flare's token economics.
Initially, block building would transition from individual validators to a designated builder operated by the Flare Entity, with a fallback to the current model if the builder is unavailable. The second stage would move block building into Flare Confidential Compute, making the process publicly auditable. In the final stage, the builder and proposer would merge into a single entity, shifting validators to a verification role.
The proposal also establishes the Flare Income Reinvestment Entity, or FIRE, which would collect revenue from various protocol sources, including fees from attestation, FAsset, Smart Accounts, confidential compute, and captured MEV. FIRE's primary objective is to reduce the FLR token supply through open-market buybacks and burns. Upon approval, several changes would take effect immediately. The annual FLR inflation rate would decrease 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 significantly raise the estimated annual FLR burn, from roughly 7.5 million to 300 million, based on current transaction volumes. Even with this increase, the cost of a standard Flare transaction would remain a fraction of a cent.
Flare has strong ties to the XRP ecosystem, having distributed its initial token supply to XRP holders in 2023 through an airdrop. Its FAssets system has produced over 150 million FXRP and is designed to bring smart contract functionality to assets on blockchains like XRPL that do not natively support it. As of late March 2026, the network reports over $160 million in total value locked, with more than 887,000 active addresses.