In a groundbreaking move, Flare has put forth 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 revenues, currently dominated by a handful of specialized actors, back into the protocol's token economics. MEV refers to the income generated by block builders through the manipulation of transaction ordering within blocks, effectively imposing a hidden tax on users. External estimates suggest that MEV revenues can reach tens of millions of dollars on certain networks, with Ethereum's MEV revenues potentially exceeding $500 million and Solana's reaching $1 billion.

The proposed three-stage plan by Flare would channel these revenues into its token economy. Initially, block building would transition from individual validators to a designated entity operated by the Flare Entity, with provisions for reverting to the current model if needed.

The second stage involves making block building publicly auditable through Flare Confidential Compute. The final stage merges the builder and proposer roles, reassigning validators to verification duties.

Furthermore, the proposal introduces FIRE (Flare Income Reinvestment Entity), tasked with collecting revenues from various protocol sources, including fees from attestations, FAssets, Smart Accounts, confidential computing, and captured MEV. FIRE's primary objective is to decrease the FLR token supply through open-market purchases and burns.

Upon approval, several changes would be implemented immediately, including a reduction in annual FLR inflation from 5% to 3%, capping the hard limit at 3 billion tokens per year, down from 5 billion. Additionally, the base gas fee would increase 20-fold, from 60 gwei to 1,200 gwei, which is expected to raise the estimated annual FLR burn significantly, to approximately 300 million, based on current transaction volumes. Notably, even with this increase, the cost of a standard Flare transaction would remain a fraction of a cent.

Flare's roots in the XRP ecosystem are significant, having conducted an airdrop of its initial token supply to XRP holders in 2023. Its FAssets system has successfully brought smart contract functionality to assets on non-compatible blockchains, such as XRPL, resulting in the creation of over 150 million FXRP. As of late March 2026, the network boasts over $160 million in total value locked, with more than 887,000 active addresses, underscoring its growing presence in the cryptocurrency landscape.