Flare has put forth a governance proposal that would enable the network to capture maximal extractable value at the protocol level, a first for a layer-1 blockchain. This move would redirect revenue from MEV, currently benefiting a select few, into the network's token economy. MEV refers to the revenue generated by block builders through transaction reordering, insertion, or censorship. On most blockchains, this value is exploited by external actors, resulting in a hidden tax on users through practices like front-running and arbitrage.
Estimates suggest that MEV revenues reach tens of millions of dollars on certain networks, exceeding $500 million on Ethereum and potentially $1 billion on Solana. The proposed three-stage plan would integrate this revenue into Flare's token economics. Initially, block building would be transferred from individual validators to a designated entity, with a fallback to the current model if needed. The process would then be made publicly auditable through Flare Confidential Compute.
Finally, the builder and proposer roles would be merged, shifting validators to a verification role. The proposal also introduces FIRE, an entity tasked with collecting revenue from various protocol sources, including fees, and using it to buy back and burn FLR tokens, thereby reducing their supply. 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, which is expected to raise the estimated annual FLR burn from approximately 7.5 million to 300 million at current transaction volumes. Despite this increase, the cost of a standard Flare transaction would remain a fraction of a cent.
With its roots in the XRP ecosystem, Flare has distributed its initial token supply to XRP holders and has developed the FAssets system, which enables smart contract functionality for assets on non-native blockchains like XRPL. As of late March 2026, the network reported over $160 million in total value locked and more than 887,000 active addresses.