In a recently published governance proposal, Flare outlined a plan to become one of the first layer-1 blockchains to capture maximal extractable value (MEV) at the protocol level, rather than allowing it to benefit a small group of specialized actors. 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 captured by external searchers and builders, who effectively impose a hidden tax on ordinary users through front-running, sandwich attacks, and arbitrage.
Estimates suggest that annual MEV revenues can reach tens of millions of dollars on networks like Arbitrum, over $500 million on Ethereum, and up to $1 billion on Solana. Flare's proposal involves a three-stage process to redirect this revenue into the protocol's token economics. Initially, block building would be transferred from individual validators to a designated builder operated by the Flare Entity, with a fallback to the current model if the builder becomes unavailable. The second stage would involve moving block building into Flare Confidential Compute, making the process publicly auditable.
The final stage would merge the builder and proposer into a single entity, shifting the role of existing validators to verification. The proposal also introduces the Flare Income Reinvestment Entity (FIRE), which would 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. If approved, several changes would take effect immediately, including a reduction in annual FLR inflation from 5% to 3%, and a decrease in the hard cap from 5 billion to 3 billion tokens per year. The base gas fee would increase 20-fold, from 60 gwei to 1,200 gwei, resulting in an estimated annual FLR burn of 300 million at current transaction volumes.
Notably, a standard Flare transaction would still cost only a fraction of a cent. With its roots in the XRP ecosystem, Flare has established a significant presence, having distributed its initial token supply through an airdrop to XRP holders in 2023.
The network's FAssets system has produced over 150 million FXRP, enabling smart contract functionality for assets on blockchains like XRPL that do not natively support it. As of late March 2026, the network reported over $160 million in total value locked, with more than 887,000 active addresses.