In a groundbreaking move, 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. This approach would redirect MEV revenue from a select group of specialized actors to the protocol's token economics. MEV refers to the revenue generated by block builders through reordering, inserting, or censoring transactions within a block, which is typically siphoned off by external searchers and builders, effectively imposing a hidden tax on ordinary users.

Estimates suggest that annual MEV revenues can reach tens of millions 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 integrate MEV revenue into its token economics. Initially, block building would be transferred from individual validators to a designated builder operated by the Flare Entity, with a fallback option to the current model if the builder is unavailable. The second stage would involve moving block building to Flare Confidential Compute, making the process publicly auditable.

The final stage would merge the builder and proposer into a single entity, transitioning existing validators to a verification role. The proposal also establishes 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. 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, including a reduction in annual FLR inflation from 5% to 3% and a decrease in the hard cap from 5 billion to 3 billion tokens per year. Additionally, the base gas fee would increase 20-fold, from 60 gwei to 1,200 gwei, resulting in an estimated annual FLR burn of 300 million, up from approximately 7.5 million, at current transaction volumes. Notably, even with the increased gas fee, a standard Flare transaction would still cost only a fraction of a cent. Flare has strong ties to the XRP ecosystem, having conducted an airdrop to XRP holders in 2023 and developed its FAssets system, which has generated over 150 million FXRP and enables smart contract functionality for assets on blockchains like XRPL that lack native support.

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