On Thursday, Flare unveiled a governance proposal that would enable the network to capture maximal extractable value at the protocol level, rather than allowing it to be controlled by a small group of actors. This move would make Flare one of the first layer-1 blockchains to achieve this. MEV refers to the revenue generated by block builders through reordering, inserting, or censoring transactions within a block. Currently, this value is captured by external searchers and builders, resulting in a hidden tax on ordinary users through front-running, sandwich attacks, and arbitrage.
Estimates suggest that annual MEV revenues range from tens of millions on networks like Arbitrum to over $1 billion on Solana. Flare's proposal would redirect this revenue into the network's token economics through a three-stage process.
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 becomes unavailable. The second stage moves block building to Flare Confidential Compute, making the process publicly auditable.
The third stage merges the builder and proposer into a single entity, shifting the role of existing validators to verification. The proposal also establishes the Flare Income Reinvestment Entity (FIRE), 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. Several changes would take effect immediately after approval, 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, resulting in an estimated annual FLR burn of 300 million at current transaction volumes. Despite this increase, the cost of a standard Flare transaction would remain 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. The network's FAssets system has produced 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.