In a bid to revolutionize its protocol, Flare has introduced a governance proposal that would enable it to capture maximal extractable value (MEV) at the protocol level. This move would make Flare one of the pioneering layer-1 blockchains to achieve this feat, thereby preventing MEV from flowing into the hands of a select few specialized actors who capitalize on transaction ordering across prominent chains.

MEV refers to the revenue generated by block builders through the reordering, insertion, or censorship of transactions within a block. Currently, on most blockchains, this value is siphoned off by external searchers and builders, effectively imposing a hidden tax on regular users through tactics such as front-running, sandwich attacks, and arbitrage.

Estimates suggest that MEV revenues can reach tens of millions of dollars on networks like Arbitrum, upwards of $500 million on Ethereum, and as high as $1 billion on Solana. The proposed three-stage plan by Flare would redirect these revenues into the protocol's token economics.

The first stage involves transferring block building from individual validators to a designated builder operated by the Flare Entity, with a fallback to the existing 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, transitioning existing validators to a verification role.

Furthermore, the proposal introduces FIRE, the Flare Income Reinvestment Entity, which would collect revenue from various protocol sources, including attestation fees, FAsset and Smart Account fees, confidential compute fees, and captured MEV. The primary objective of FIRE is to decrease the FLR token supply through open-market buybacks and burns. Upon approval, several changes would take effect immediately. The annual FLR inflation rate would decrease from 5% to 3%, with the hard cap reduced to 3 billion tokens per year from 5 billion.

A 20-fold increase in the base gas fee, from 60 gwei to 1,200 gwei, would raise the estimated annual FLR burn from approximately 7.5 million to 300 million at current transaction volumes. Notably, even with this 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 boasts over $160 million in total value locked, with more than 887,000 active addresses.