In a bid to revolutionize its protocol, Flare has put forth a governance proposal that would make it a pioneer among layer-1 blockchains in capturing maximal extractable value (MEV) at the protocol level. This move would prevent MEV from flowing into the hands of a select few specialized actors who currently profit from transaction ordering on most major chains.

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 siphoned off by external searchers and builders, effectively imposing 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 as much as $1 billion on Solana. Flare's proposal outlines a three-stage plan to redirect this revenue into its own token economics.

The first stage involves transitioning 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 moves block building into 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 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 reduce the FLR token supply through open-market buybacks and burns. Several changes would take effect immediately after approval, including a reduction in annual FLR inflation from 5% to 3%, with the hard cap cut to 3 billion tokens per year from 5 billion.

A 20-fold increase to the base gas fee, from 60 gwei to 1,200 gwei, would raise the estimated annual FLR burn from roughly 7.5 million to 300 million at current transaction volumes. Even with this increase, a standard Flare transaction would cost only a fraction of a cent. As a network with deep roots in the XRP ecosystem, having distributed its initial token supply through an airdrop to XRP holders in 2023, Flare's FAssets system has produced over 150 million FXRP, bringing smart contract functionality to assets on blockchains like XRPL that do not natively support it.

The network boasts over $160 million in total value locked as of late March 2026, with more than 887,000 active addresses.