In a groundbreaking move, Flare has put forth a governance proposal that would enable it to become one of the pioneering layer-1 blockchains to harness maximal extractable value (MEV) at the protocol level, thereby preventing a select group of specialized actors from profiting from transaction ordering. MEV refers to the revenue generated by block builders through the reordering, insertion, or censorship of transactions within a block. Currently, this value is largely absorbed by external searchers and builders, effectively imposing a hidden tax on ordinary users through practices such as front-running, sandwich attacks, and arbitrage.

According to external estimates, annual MEV revenues are substantial, with tens of millions of dollars being generated on networks like Arbitrum, over $500 million on Ethereum, and as much as $1 billion on Solana. Flare's proposal is divided into three stages, with the primary objective of redirecting MEV revenue into the protocol's token economics. The first stage involves transferring block building responsibilities 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 transitions block building to Flare Confidential Compute, making the process publicly auditable. The third stage merges the builder and proposer into a single entity, shifting the role of existing validators to a verification capacity. The proposal also introduces FIRE, the Flare Income Reinvestment Entity, which will collect revenue from multiple protocol sources, including attestation fees, FAsset and Smart Account fees, confidential compute fees, and captured MEV.

FIRE's primary mandate is to decrease the FLR token supply through open-market buybacks and burns. Several changes would take effect immediately upon approval, including a reduction in annual FLR inflation to 3% from 5% and a decrease in the hard cap to 3 billion tokens per year from 5 billion. Additionally, a 20-fold increase to the base gas fee, from 60 gwei to 1,200 gwei, is expected to raise the estimated annual FLR burn from roughly 7.5 million to 300 million at current transaction volumes. Notably, even after the increase, the cost of a standard Flare transaction would remain 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 reports over $160 million in total value locked, with more than 887,000 active addresses.