In a bid to revolutionize the blockchain landscape, Flare has put forth a governance proposal that enables the capture of maximal extractable value (MEV) at the protocol level. This move would make Flare one of the pioneering layer-1 blockchains to achieve this feat, thereby preventing MEV from being monopolized by a select group of specialized actors who currently profit from transaction ordering. MEV refers to the revenue generated by block builders through the reordering, insertion, or censorship of transactions within a block. On most blockchain networks, this value is siphoned off by external searchers and builders, resulting in a hidden tax on ordinary users through front-running, sandwich attacks, and arbitrage.
According to external estimates, annual MEV revenues can reach tens of millions of dollars on networks like Arbitrum, upwards of $500 million on Ethereum, and as high as $1 billion on Solana. Flare's proposed three-stage plan 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 becomes unavailable.
The second stage migrates block building to Flare Confidential Compute, making the process publicly auditable. The third stage consolidates the builder and proposer into a single entity, transitioning existing validators to a verification role. The proposal also introduces FIRE, the Flare Income Reinvestment Entity, which would collect revenue from multiple 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. The annual FLR inflation rate would drop to 3% from 5%, with the hard cap reduced to 3 billion tokens per year from 5 billion.
A 20-fold increase in 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. Notably, even after the increase, a standard Flare transaction would cost only 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 boasts over $160 million in total value locked, with more than 887,000 active addresses.