In a groundbreaking move, Flare has put forth a governance proposal to become one of the first layer-1 blockchains to harness maximal extractable value (MEV) at the protocol level, rather than allowing it to be controlled by a select group of specialized actors who currently reap the benefits of transaction ordering across 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 captured by external searchers and builders, effectively imposing a hidden tax on regular users through front-running, sandwich attacks, and arbitrage. Estimates suggest that annual MEV revenues range from tens of millions on networks like Arbitrum to over $500 million on Ethereum and as much as $1 billion on Solana.

Flare's three-stage proposal aims to redirect this revenue into the protocol's token economics. The first stage involves transferring 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 is 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 establishes FIRE, the Flare Income Reinvestment Entity, which will 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 will take effect immediately. Annual FLR inflation will decrease to 3% from 5%, with the hard cap reduced 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, is expected to raise the estimated annual FLR burn from approximately 7.5 million to 300 million at current transaction volumes.

Even with the increase, a standard Flare transaction will 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 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.