Flare has introduced a governance proposal to capture maximal extractable value at the protocol level, making it a pioneer among layer-1 blockchains. This move would redirect revenue from MEV, currently benefiting a select few, to the protocol's token economy. MEV refers to the income generated by block builders through transaction reordering, insertion, or censorship.
On most blockchains, this value is captured by external searchers and builders, effectively imposing a hidden tax on users. Estimates suggest that MEV revenues reach tens of millions of dollars on certain networks, with Ethereum and Solana potentially generating $500 million and $1 billion, respectively.
The proposed three-stage plan would integrate MEV revenue into Flare's token economics. Initially, block building would be handled by a designated entity, with a fallback to the current model if needed. The process would then become publicly auditable through Flare Confidential Compute, and eventually, the builder and proposer would merge into a single entity, transitioning validators to a verification role. The proposal also establishes the Flare Income Reinvestment Entity (FIRE) to collect revenue from various protocol sources, including fees and captured MEV, with the primary goal of reducing FLR token supply through open-market buybacks and burns.
Upon approval, several changes would take effect, 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. The base gas fee would increase 20-fold, from 60 gwei to 1,200 gwei, resulting in a significant rise in estimated annual FLR burn.
With its roots in the XRP ecosystem, Flare has distributed its initial token supply to XRP holders and offers smart contract functionality to assets on blockchains like XRPL through its FAssets system. As of late March 2026, the network reports over $160 million in total value locked and more than 887,000 active addresses.