In a recently published governance proposal, Flare aims to become one of the first layer-1 blockchains to capture maximal extractable value (MEV) at the protocol level. This approach would redirect revenue from MEV, which is typically extracted by block builders through transaction reordering, insertion, or censorship, into the protocol's token economy. MEV is a significant revenue stream, with estimates suggesting it reaches tens of millions of dollars on networks like Arbitrum, $500 million on Ethereum, and $1 billion on Solana.
The proposed three-stage plan would initially transfer block building to a designated entity operated by the Flare Entity, with a fallback to the current model if needed. The process would then become publicly auditable through Flare Confidential Compute, and finally, the builder and proposer would merge into a single entity, transitioning validators to a verification role.
A new entity, FIRE (Flare Income Reinvestment Entity), would be established to collect revenue from various protocol sources, including fees from attestation, FAsset, Smart Accounts, confidential compute, and captured MEV. FIRE's primary goal is to reduce 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%, cutting the hard cap from 5 billion to 3 billion tokens per year. The base gas fee would increase 20-fold, from 60 gwei to 1,200 gwei, potentially raising the estimated annual FLR burn from approximately 7.5 million to 300 million at current transaction volumes.
Notably, 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.
Its FAssets system has generated over 150 million FXRP, aiming to bring smart contract functionality to assets on blockchains like XRPL that lack native support. As of late March 2026, the network reported over $160 million in total value locked, with more than 887,000 active addresses.