In a bid to become one of the first layer-1 blockchains to capture maximal extractable value (MEV) at the protocol level, Flare has introduced a governance proposal. This move would redirect MEV revenue from specialized actors to the protocol's token economics, potentially generating tens of millions of dollars in revenue.
MEV refers to the income that block builders earn by reordering, inserting, or censoring transactions within a block. Currently, this value is largely controlled by external searchers and builders who impose a hidden tax on users through front-running, sandwich attacks, and arbitrage. The proposed three-stage plan would transfer block building from individual validators to a designated entity, making the process publicly auditable and eventually merging the builder and proposer into a single entity.
The proposal also establishes the Flare Income Reinvestment Entity (FIRE) to collect revenue from various protocol sources, including MEV, and use it to buy back and burn FLR tokens, thereby reducing the token supply. If approved, the plan would immediately reduce annual FLR inflation from 5% to 3%, cut the hard cap from 5 billion to 3 billion tokens per year, and increase the base gas fee 20-fold.
This increase would result in a significant rise in estimated annual FLR burn, from approximately 7.5 million to 300 million, at current transaction volumes. Furthermore, Flare's FAssets system has successfully brought smart contract functionality to assets on non-native blockchains, such as XRPL, producing over 150 million FXRP. As of late March 2026, the network boasts over $160 million in total value locked and more than 887,000 active addresses, demonstrating its deep roots in the XRP ecosystem.