In a bid to revolutionize the blockchain landscape, Flare has unveiled a governance proposal that would enable it to capture maximal extractable value (MEV) at the protocol level, a first for a layer-1 blockchain. This move would redirect MEV revenue, currently dominated by a handful of specialized actors, back into the protocol's token economy.

MEV refers to the revenue generated by block builders through the reordering, insertion, or censorship of transactions within a block, effectively imposing a hidden tax on ordinary users. Estimates suggest that annual MEV revenues reach tens of millions of dollars on networks like Arbitrum, over $500 million on Ethereum, and up to $1 billion on Solana. Flare's proposal outlines a three-stage plan to integrate MEV revenue into its token economics. The first stage involves transferring block building responsibilities from individual validators to a designated builder, initially managed 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, reassigning existing validators to a verification role.

The proposal also introduces FIRE, the Flare Income Reinvestment Entity, which will 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 will take effect immediately. The annual FLR inflation rate will decrease to 3% from 5%, with the hard cap reduced to 3 billion tokens per year from 5 billion.

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. Notably, even with the increase, the cost of a standard Flare transaction will remain a fraction of a cent.

Flare's roots in the XRP ecosystem run deep, having distributed its initial token supply through an airdrop to XRP holders in 2023. Its FAssets system has produced over 150 million FXRP, aiming to bring 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.