In a groundbreaking move, Flare has unveiled a three-stage proposal to become one of the pioneering layer-1 blockchains to harness maximal extractable value (MEV) at the protocol level, thereby reducing the control of a select few specialized actors over transaction ordering. MEV refers to the revenue generated by block builders through the reordering, insertion, or censorship of transactions within a block.

Currently, this value is largely absorbed by external searchers and builders, resulting in a hidden tax on ordinary users through practices like front-running, sandwich attacks, and arbitrage. Estimates suggest that annual MEV revenues can range from tens of millions on networks like Arbitrum to over $1 billion on Solana. Flare's innovative proposal seeks to redirect this revenue into its own token economics. The first stage involves transitioning block building from individual validators to a designated builder operated by the Flare Entity, with a fallback mechanism in place.

The second stage introduces Flare Confidential Compute, making the block-building process publicly auditable. The third and final stage merges the builder and proposer into a single entity, reassigning existing validators to a verification role. Furthermore, the proposal establishes FIRE, the Flare Income Reinvestment Entity, which will 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 will take effect immediately. The annual FLR inflation rate will decrease from 5% to 3%, with the hard cap reduced from 5 billion to 3 billion tokens per year.

A significant increase to the base gas fee, from 60 gwei to 1,200 gwei, is expected to raise 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 will remain a fraction of a cent. With its roots deeply embedded in the XRP ecosystem, Flare has previously distributed its initial token supply through an airdrop to XRP holders in 2023.

Its FAssets system has successfully produced 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 boasts over $160 million in total value locked, with more than 887,000 active addresses.