In a bid to become a pioneer in layer-1 blockchains, Flare has unveiled a governance proposal that seeks to harness maximal extractable value (MEV) at the protocol level, thereby preventing it from being controlled by a handful of specialized actors. This move would significantly impact the way transactions are ordered and executed across 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 users.

According to external estimates, MEV revenues can reach tens of millions of dollars on certain networks, such as Arbitrum, and exceed $500 million on Ethereum. Flare's proposal outlines a three-stage plan to redirect MEV revenue into the protocol's token economics. The first stage involves transferring block building from individual validators to a designated entity, initially managed by the Flare Entity, with a fallback option to the current model if the designated builder is unavailable.

The second stage shifts block building to Flare Confidential Compute, making the process publicly auditable. The third stage merges the builder and proposer into a single entity, reassigning existing validators to a verification role. Furthermore, the proposal introduces FIRE, the Flare Income Reinvestment Entity, which will 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 decrease the FLR token supply through open-market buybacks and burns. Upon approval, several changes will take effect immediately. The annual FLR inflation rate will decrease to 3% from 5%, and the hard cap will be 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, 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. Flare has strong ties to the XRP ecosystem, having distributed its initial token supply through an airdrop to XRP holders in 2023. Its FAssets system has generated 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.