In a bid to become one of the pioneering layer-1 blockchains to capture maximal extractable value (MEV) at the protocol level, Flare has put forth a governance proposal. This move would redirect MEV, currently dominated by a handful of specialized actors, back into the protocol. MEV refers to the revenue generated by block builders through the strategic ordering, insertion, or censorship of transactions within a block, essentially imposing a hidden tax on users.

Estimates suggest that MEV revenues reach tens of millions of dollars on certain networks, exceeding $500 million on Ethereum and potentially $1 billion on Solana. Flare's proposal is designed to funnel this revenue into its token economics through a three-stage process.

Initially, block building will transition from individual validators to a designated entity, with a fallback to the current model if needed. The second stage involves moving block building into Flare Confidential Compute, enhancing public auditability.

The final stage consolidates the builder and proposer roles, shifting validators to a verification capacity. Additionally, the proposal introduces FIRE (Flare Income Reinvestment Entity), tasked with collecting revenue from various protocol sources, including fees from attestation, FAsset, Smart Accounts, confidential compute, and captured MEV.

FIRE's primary objective is to decrease the FLR token supply through open-market buybacks and burns. Upon approval, several changes will be implemented immediately. The annual FLR inflation rate will decrease to 3% from 5%, and the hard cap will be reduced to 3 billion tokens per year from 5 billion. A significant increase in 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, based on current transaction volumes.

Notably, even with this increase, the cost of a standard Flare transaction will remain a fraction of a cent. With its roots deeply embedded in the XRP ecosystem, Flare distributed its initial token supply via an airdrop to XRP holders in 2023. Its FAssets system has successfully produced over 150 million FXRP, aiming to bring smart contract functionality to assets on blockchains like XRPL that lack native support.

As of late March 2026, the network boasts over $160 million in total value locked, with more than 887,000 active addresses, underscoring its growing presence in the cryptocurrency landscape.