In a bid to revolutionize its token economics, Flare has put forth a governance proposal that would enable the capture of maximal extractable value (MEV) directly at the protocol level, thereby preventing it from being siphoned off by a select group of specialized actors who currently profit from transaction ordering on most major blockchain networks. MEV refers to the revenue generated by block builders through the reordering, insertion, or censorship of transactions within a block, effectively imposing a hidden tax on ordinary users through front-running, sandwich attacks, and arbitrage. According to external estimates, annual MEV revenues can reach tens of millions of dollars on certain networks, such as Arbitrum, over $500 million on Ethereum, and as high as $1 billion on Solana. Flare's proposal is structured into three stages, with the ultimate goal of routing the captured MEV revenue into the protocol's own token economics.

The first stage involves transferring block building responsibilities from individual validators to a designated builder operated by the Flare Entity, with a fallback option to the existing model if the designated builder becomes unavailable. The second stage entails moving block building into Flare Confidential Compute, rendering the process publicly auditable.

The final stage merges the builder and proposer into a single entity, transitioning the role of existing validators to a verification capacity. Furthermore, the proposal introduces FIRE, the Flare Income Reinvestment Entity, which will be responsible for collecting revenue from various protocol sources, including attestation fees, FAsset and Smart Account fees, confidential compute fees, and the captured MEV. FIRE's primary objective is to reduce the FLR token supply through open-market buybacks and burns. Upon approval, several changes will take effect immediately, including a decrease in annual FLR inflation from 5% to 3%, with the hard cap reduced to 3 billion tokens per year from 5 billion.

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 the increased gas fee, a standard Flare transaction would still cost only 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 the FAssets system, which has produced over 150 million FXRP, aiming to bring smart contract functionality to assets on blockchains like XRPL that lack native support. As of late March 2026, the network boasts over $160 million in total value locked, with more than 887,000 active addresses.