In a bid to revolutionize its token economics, Flare has unveiled a governance proposal that would make it a pioneer in capturing maximal extractable value (MEV) at the protocol level. This move would redirect MEV revenue from a select group of specialized actors to the protocol itself, thereby creating a more equitable system. MEV refers to the revenue generated by block builders through reordering, inserting, or censoring transactions within a block, which often results in a hidden tax on ordinary users due to front-running, sandwich attacks, and arbitrage. According to external estimates, annual MEV revenues can reach tens of millions on networks like Arbitrum, over $500 million on Ethereum, and up to $1 billion on Solana.

The proposed three-stage plan would integrate this revenue into Flare's token economics. The first stage involves transferring block building from individual validators to a designated builder operated by the Flare Entity, with a fallback to the current model if the builder is unavailable. The second stage moves block building to Flare Confidential Compute, making the process publicly auditable. In the third stage, the builder and proposer are merged into a single entity, shifting existing validators to a verification role.

Additionally, the proposal 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 reduce the FLR token supply through open-market buybacks and burns. Upon approval, several changes would take effect immediately. The annual FLR inflation rate would decrease from 5% to 3%, 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. With its roots in the XRP ecosystem, Flare distributed its initial token supply through an airdrop to XRP holders in 2023. Its FAssets system has generated 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 reports over $160 million in total value locked, with more than 887,000 active addresses.