On Thursday, Flare unveiled a governance proposal that would enable it to become one of the pioneering layer-1 blockchains to capture maximal extractable value (MEV) directly at the protocol level. This approach would prevent MEV from being diverted to a limited number of specialized actors who currently profit from transaction ordering across various major chains.

MEV refers to the revenue generated by block builders through the reordering, insertion, or censorship of transactions within a block. Typically, this value is captured by external searchers and builders, who effectively impose a hidden tax on ordinary users through front-running, sandwich attacks, and arbitrage. According to external estimates, annual MEV revenues can reach tens of millions on networks such as Arbitrum, exceed $500 million on Ethereum, and potentially surpass $1 billion on Solana. Flare's three-stage proposal aims to redirect this revenue into the protocol's token economics.

The proposal's initial stage involves transferring block building responsibilities from individual validators to a designated builder, which would initially be operated by the Flare Entity, with a fallback to the current model if the builder becomes unavailable. The second stage would move block building into Flare Confidential Compute, making the process publicly auditable.

The third stage would merge the builder and proposer into a single entity, shifting existing validators to a verification role. Additionally, the proposal introduces FIRE, the Flare Income Reinvestment Entity, which would collect revenue from multiple 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. Several changes would take effect immediately after approval, including a reduction in annual FLR inflation from 5% to 3%, with the hard cap decreased 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 roughly 7.5 million to 300 million at current transaction volumes. Even after the increase, a standard Flare transaction would cost a fraction of a cent. Flare has deep roots in the XRP ecosystem, having distributed its initial token supply through an airdrop to XRP holders in 2023. Its FAssets system, designed to bring smart contract functionality to assets on blockchains like XRPL that do not natively support it, has produced over 150 million FXRP.

As of late March 2026, the network reports over $160 million in total value locked, with more than 887,000 active addresses.