On Thursday, Flare introduced a governance proposal that would enable it to become one of the first layer-1 blockchains to capture maximal extractable value (MEV) at the protocol level, rather than allowing it to accrue to a limited number of specialized actors who benefit from transaction ordering across major blockchain networks. 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 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 of dollars on networks like Arbitrum, over $500 million on Ethereum, and up to $1 billion on Solana. Flare's proposed three-stage plan would redirect this revenue into the protocol's token economics.
The first stage involves transferring block building responsibilities 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 migrates block building to Flare Confidential Compute, making the process publicly auditable. The third stage merges the builder and proposer into a single entity, shifting the role of existing validators to a verification function. The proposal also 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 reduce the FLR token supply through open-market buybacks and burns. Several changes would take effect immediately upon approval, 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. A 20-fold increase in the base gas fee, from 60 gwei to 1,200 gwei, is expected to raise the estimated annual FLR burn from approximately 7.5 million to 300 million at current transaction volumes.
Even with the increase, a standard Flare transaction would 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.