On Thursday, Flare published 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 prevent MEV from being controlled by a limited number of specialized actors who profit from transaction ordering on most major chains.

Instead, the revenue generated by MEV would be redirected into the protocol's token economics. MEV refers to the income that block builders earn by reordering, inserting, or censoring transactions within a block.

Currently, this value is captured by external searchers and builders, who impose a hidden tax on ordinary users through front-running, sandwich attacks, and arbitrage. According to external estimates, annual MEV revenues range from tens of millions on networks like Arbitrum to $500 million on Ethereum and up to $1 billion on Solana.

The three-stage proposal put forth by Flare would channel this revenue into the protocol's own token economy. Initially, block building would be transferred from individual validators to a designated builder operated by the Flare Entity, with a fallback to the current model if the builder becomes unavailable. In the second stage, block building would be integrated into Flare Confidential Compute, making the process publicly auditable. The third stage would merge the builder and proposer into a single entity, shifting the role of existing validators to a verification function.

Additionally, the proposal introduces FIRE, the Flare Income Reinvestment Entity, which would collect revenue from multiple 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 after approval, including a reduction in annual FLR inflation from 5% to 3%, with the hard cap decreased to 3 billion tokens per year from 5 billion.

The base gas fee would increase 20-fold, from 60 gwei to 1,200 gwei, which would raise the estimated annual FLR burn from approximately 7.5 million to 300 million at current transaction volumes. Even with this 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 generated 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.