In a bid to revolutionize its token economics, Flare has introduced a governance proposal that would make it a pioneer among layer-1 blockchains in capturing maximal extractable value (MEV) at the protocol level. This move aims to redirect the revenue generated from MEV away from a select group of specialized actors who currently benefit from transaction ordering across major chains.

MEV refers to the revenue that block builders generate by manipulating transactions within a block, which often results in a hidden tax on ordinary users through practices like front-running, sandwich attacks, and arbitrage. Estimates suggest that MEV revenues can reach tens of millions of dollars on networks like Arbitrum, upwards of $500 million on Ethereum, and as high as $1 billion on Solana. Flare's proposal is designed to channel this revenue back into its own token economy through a three-stage process. Initially, block building would be transferred from individual validators to a designated entity, with a fallback option to the current model if the builder is 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 into a verification role.

The proposal also introduces FIRE, the Flare Income Reinvestment Entity, which would collect revenue from various protocol sources, including fees from attestation, FAsset, Smart Accounts, confidential compute, 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, 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.

Additionally, 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 this increase, the cost of a standard Flare transaction would remain a fraction of a cent. With its roots deeply embedded in the XRP ecosystem, Flare has distributed its initial token supply through an airdrop to XRP holders in 2023 and has developed its FAssets system 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 and more than 887,000 active addresses, underscoring its growing presence in the cryptocurrency landscape.