Flare has introduced a governance proposal that would make it a pioneer among layer-1 blockchains in capturing maximal extractable value (MEV) at the protocol level, rather than allowing it to benefit a limited number of specialized actors. 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, who effectively impose a hidden tax on regular users through practices like front-running, sandwich attacks, and arbitrage.

According to external estimates, 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 direct MEV revenue 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 current model if the builder is unavailable. The second stage moves block building to 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 the Flare Income Reinvestment Entity (FIRE) to 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 would take effect immediately.

Annual FLR inflation would decrease to 3% from 5%, and the hard cap would be 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, would 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 would 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.