On Thursday, Flare published a governance proposal that, if implemented, would make it a pioneer among layer-1 blockchains in capturing maximal extractable value (MEV) at the protocol level. This move would prevent MEV from being controlled by a limited number of specialized actors who currently profit from transaction ordering on most major chains. MEV refers to the revenue generated by block builders through the reordering, insertion, or censorship of transactions within a block. Currently, this value is typically captured by external searchers and builders, resulting in a hidden tax on ordinary users through practices like front-running, sandwich attacks, and arbitrage.

Estimates suggest that annual MEV revenues are substantial, with tens of millions of dollars on networks like Arbitrum, over $500 million on Ethereum, and potentially $1 billion on Solana. The proposed three-stage plan would redirect MEV revenue into Flare's token economics. The first stage involves transferring block building from individual validators to a designated builder operated by the Flare Entity, with a fallback to the current model if the builder becomes unavailable. The second stage moves block building into Flare Confidential Compute, making the process publicly auditable.

In the third stage, the builder and proposer are merged into a single entity, with existing validators shifting 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 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%, with the hard cap 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 raise the estimated annual FLR burn from approximately 7.5 million to 300 million at current transaction volumes. Despite 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 through an airdrop to XRP holders in 2023. 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.