In a recent governance proposal, Flare has outlined a plan to become one of the first layer-1 blockchains to capture maximal extractable value (MEV) at the protocol level, rather than allowing it to benefit a select group of specialized actors. MEV refers to the revenue generated by block builders through the reordering, insertion, or censorship of transactions within a block.
On most blockchains, this value is captured by external searchers and builders, effectively imposing a hidden tax on regular users through practices such as front-running, sandwich attacks, and arbitrage. According to external estimates, annual MEV revenues can reach tens of millions of dollars on networks like Arbitrum, over $500 million on Ethereum, and up to $1 billion on Solana. Flare's proposal involves a three-stage process to 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 to 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. The proposal also establishes the Flare Income Reinvestment Entity (FIRE) to 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. If approved, several changes would take effect immediately, including a reduction in annual FLR inflation from 5% to 3%, with the hard cap decreasing 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. Even with the increase, a standard Flare transaction would 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 and has developed the FAssets system, which has produced over 150 million FXRP, 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.