In a bid to redefine the blockchain landscape, Flare has unveiled a governance proposal that aims to capture maximal extractable value (MEV) at the protocol level, thereby reducing the hidden tax imposed on users by external actors. This innovative approach would make Flare one of the first layer-1 blockchains to achieve this feat. The proposal outlines a three-stage plan to redirect MEV revenue into the protocol's token economics, starting with the transfer of block building from individual validators to a designated entity.
The process would then become publicly auditable through Flare Confidential Compute, ultimately merging the builder and proposer into a single entity. A new entity, FIRE (Flare Income Reinvestment Entity), would be established to collect revenue from various protocol sources, including MEV, and utilize la FLR token supply through strategic buybacks and burns. Upon approval, the proposal would immediately reduce annual FLR inflation from 5% to 3%, lower the hard cap to 3 billion tokens per year, and increase the base gas fee to raise the estimated annual FLR burn. With its roots in the XRP ecosystem and a unique FAssets system, Flare is poised to make a significant impact on the blockchain industry, boasting over $160 million in total value locked and 887,000 active addresses as of late March 2026.