In a groundbreaking move, Flare has unveiled a governance proposal that would enable the capture of maximal extractable value (MEV) at the protocol level, a first for a layer-1 blockchain. This approach would redirect revenue from MEV, currently dominated by a select few actors, into the protocol's token economy. MEV refers to the revenue generated by block builders through reordering, inserting, or censoring transactions within a block, effectively imposing a hidden tax on users.

Estimates suggest that MEV revenues reach tens of millions on networks like Arbitrum, upwards of $500 million on Ethereum, and as much as $1 billion on Solana. Flare's proposal is structured in three stages, with the first stage involving the transfer of block building from individual validators to a designated entity, initially managed by the Flare Entity, with a fallback option 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. The final stage would merge the builder and proposer into a single entity, shifting 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 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%, with the hard cap decreased to 3 billion tokens per year from 5 billion.

The base gas fee would increase 20-fold, from 60 gwei to 1,200 gwei, resulting in an estimated annual FLR burn of 300 million, up from roughly 7.5 million, at current transaction volumes. Notably, a standard Flare transaction would still cost only a fraction of a cent. With its roots in the XRP ecosystem, Flare has distributed its initial token supply through an airdrop to XRP holders in 2023.

Its FAssets system has produced over 150 million FXRP, aiming 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.