In a bid to redefine the blockchain landscape, Flare has unveiled a governance proposal that would make it the first layer-1 blockchain to harness maximal extractable value (MEV) at the protocol level. This move would redirect MEV revenue away from a select few specialized actors and into the protocol's token economics, thereby reducing the hidden tax imposed on ordinary users through front-running, sandwich attacks, and arbitrage.

According to external estimates, MEV revenues can reach tens of millions on networks like Arbitrum, exceed $500 million on Ethereum, and even surpass $1 billion on Solana. The proposed three-stage plan involves transitioning block building from individual validators to a designated entity, initially managed by the Flare Entity, with a fallback option to the current model if the builder is unavailable. The second stage would integrate block building into Flare Confidential Compute, making the process publicly auditable. The final stage would merge the builder and proposer into a single entity, shifting existing validators to a verification role.

Furthermore, the proposal introduces 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 decrease the FLR token supply through open-market buybacks and burns.

Upon approval, several changes would take effect immediately, including a reduction in annual FLR inflation from 5% to 3%, with the hard cap cut to 3 billion tokens per year from 5 billion. Additionally, a 20-fold increase to the base gas fee, from 60 gwei to 1,200 gwei, would significantly raise the estimated annual FLR burn from roughly 7.5 million to 300 million at current transaction volumes. Notably, even after this increase, a standard Flare transaction would cost only a fraction of a cent.

With its roots deeply entrenched in the XRP ecosystem, Flare has distributed its initial token supply through an airdrop to XRP holders in 2023. Its FAssets system has successfully produced over 150 million FXRP, bringing 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, underscoring its growing presence in the blockchain space.