In a groundbreaking move, Flare has put forth a governance proposal that would enable the network to capture maximal extractable value (MEV) directly at the protocol level. This approach would divert MEV revenue away from a select group of specialized actors and into the network's own token economy. MEV refers to the revenue generated by block builders through the strategic reordering, insertion, or censorship of transactions within a block. Currently, this value is largely captured by external searchers and builders, who impose a hidden tax on regular users through front-running, sandwich attacks, and arbitrage.
Estimated annual MEV revenues range from tens of millions on networks like Arbitrum to over $1 billion on Solana. Flare's proposal is designed to redirect this revenue into its token economics through a three-stage process. 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.
The second stage would involve moving block building into 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 introduces 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 decrease the FLR token supply through open-market buybacks and burns.
Upon approval, several changes would take effect immediately. Annual FLR inflation would 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, 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.