In a bid to revolutionize its token economics, Flare has introduced a governance proposal that would make it a pioneer in capturing maximal extractable value (MEV) at the protocol level. This move would divert MEV revenue away from specialized actors and into the protocol itself. MEV refers to the revenue generated by block builders through transaction reordering, insertion, or censorship within a block.

Currently, this value is predominantly captured by external searchers and builders, resulting in a hidden tax on ordinary users. Estimates suggest that MEV revenues can reach tens of millions of dollars on certain networks, with Ethereum and Solana potentially generating up to $500 million and $1 billion, respectively. The proposed three-stage plan would redirect this revenue into Flare's token economics.

Initially, block building would be transferred from individual validators to a designated builder operated by the Flare Entity, with a fallback option to the current model if the builder becomes unavailable. The second stage would involve transitioning block building to Flare Confidential Compute, making the process publicly auditable. In the final stage, the builder and proposer would be merged into a single entity, with existing validators assuming a verification role. 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. Upon approval, several changes would take effect immediately.

The annual FLR inflation rate would decrease from 5% to 3%, with the hard cap reduced from 5 billion to 3 billion tokens per year. 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. Despite this increase, the cost of a standard Flare transaction would remain a fraction of a cent.

With its roots in the XRP ecosystem, Flare has distributed its initial token supply through an airdrop to XRP holders in 2023. The network's FAssets system has produced over 150 million FXRP, enabling smart contract functionality for 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.