In a bid to become a pioneer in layer-1 blockchains, Flare has unveiled a governance proposal that seeks to capture maximal extractable value (MEV) at the protocol level. This move would redirect MEV revenues, currently flowing to a limited number of specialized actors, into the protocol's token economics. MEV refers to the revenue generated by block builders through reordering, inserting, or censoring transactions within a block, effectively imposing a hidden tax on users.
By routing this revenue into the protocol, Flare aims to create a more equitable and transparent system. The proposed three-stage plan involves transferring 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. Furthermore, the proposal introduces FIRE, an entity responsible for collecting revenue from various protocol sources, including MEV, and using it to buy back and burn FLR tokens, thereby reducing the token supply.
Upon approval, several changes would take effect, including a reduction in annual FLR inflation from 5% to 3%, a decrease in the hard cap from 5 billion to 3 billion tokens per year, and a significant increase in the base gas fee. These changes are expected to raise the estimated annual FLR burn from approximately 7.5 million to 300 million at current transaction volumes. With its roots in the XRP ecosystem and a growing presence, Flare's FAssets system has already produced over 150 million FXRP, bringing smart contract functionality to assets on blockchains like XRPL. As of late March 2026, the network boasts over $160 million in total value locked and more than 887,000 active addresses, underscoring its potential for growth and innovation.