On Thursday, Flare introduced a governance proposal aimed at becoming one of the first layer-1 blockchains to capture maximal extractable value (MEV) at the protocol level. This move would redirect revenue from external actors who currently profit from transaction ordering on major chains. 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 through front-running, sandwich attacks, and arbitrage.

Estimates suggest that annual MEV revenues reach tens of millions on networks like Arbitrum, over $500 million on Ethereum, and up to $1 billion on Solana. The three-stage proposal by Flare would redirect this revenue into the protocol's token economics.

The first stage involves transferring block building from individual validators to a designated builder, initially operated by the Flare Entity, with a fallback to the current model if the builder is unavailable. The second stage moves block building into Flare Confidential Compute, making the process publicly auditable. The third stage merges the builder and proposer into a single entity, shifting existing validators to a verification role. Additionally, the proposal 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%, and the hard cap would be cut to 3 billion tokens per year from 5 billion. A 20-fold increase to 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, a standard Flare transaction would still cost 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 reported over $160 million in total value locked, with more than 887,000 active addresses.