In a groundbreaking move, Flare has unveiled a governance proposal that would enable it to capture maximal extractable value (MEV) at the protocol level, a first for a layer-1 blockchain. This approach would redirect the revenue generated by MEV away from a select few specialized actors and into the protocol's token economics. MEV refers to the income that block builders derive from reordering, inserting, or censoring transactions within a block, effectively imposing a hidden tax on ordinary users. By implementing this proposal, Flare would be routing the revenue into its own token economics, reducing reliance on external actors.

The proposed three-stage plan would initially transfer block building from individual validators to a designated builder, with a fallback option to the current model if needed. The second stage would integrate 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. 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 decrease 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% and a decrease in 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, resulting in an estimated annual FLR burn of 300 million at current transaction volumes. Despite this increase, the cost of a standard Flare transaction would remain 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, enabling smart contract functionality for 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.