In a groundbreaking move, Flare has introduced a governance proposal to capture maximal extractable value (MEV) at the protocol level, a first for a layer-1 blockchain. This approach would redirect MEV revenue from external actors to the protocol's token economics. MEV refers to the income generated by block builders through transaction reordering, insertion, or censorship. Currently, this value is largely exploited by a select few, resulting in a hidden tax on ordinary 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 proposed three-stage plan would channel this revenue into Flare's token economy.

The first stage involves transferring block building from individual validators to a designated entity, initially managed by the Flare Entity, with a fallback to the current model if needed. 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, transitioning 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. Upon approval, several changes would take effect immediately. The annual FLR inflation rate would decrease 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 with this 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, aiming 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.