In a groundbreaking move, Flare has introduced a governance proposal that would enable the network to capture maximal extractable value (MEV) at the protocol level, rather than allowing it to be exploited by a select few. This approach would make Flare one of the first layer-1 blockchains to achieve this feat. 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 actors who impose a hidden tax on ordinary users through front-running, sandwich attacks, and arbitrage.
Estimates suggest that MEV revenues can reach tens of millions of dollars on networks like Arbitrum, over $500 million on Ethereum, and as high as $1 billion on Solana. Flare's proposal would redirect this revenue into the network's token economics through a three-stage process. 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 becomes 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), 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. Upon approval, several changes would take effect immediately. The annual FLR inflation rate would decrease from 5% to 3%, with the hard cap reduced from 5 billion to 3 billion tokens per year.
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. Despite this increase, a standard Flare transaction would still 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.