On Thursday, Flare announced a governance proposal aimed at capturing maximal extractable value (MEV) at the protocol level, a move that would set it apart from other layer-1 blockchains where MEV typically benefits a select group of specialized actors. 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 via front-running, sandwich attacks, and arbitrage. Estimates suggest that MEV revenues reach tens of millions of dollars on networks like Arbitrum, over $500 million on Ethereum, and up to $1 billion on Solana. Flare's proposal involves a three-stage process to redirect MEV revenue into its token economics.

Initially, block building would be managed by a designated builder operated by the Flare Entity, with a fallback to the current model if the builder becomes unavailable. The second stage would integrate block building into Flare Confidential Compute, making the process publicly auditable. In the final stage, the builder and proposer would be merged into a single entity, transitioning existing validators to a verification role.

The proposal also introduces the Flare Income Reinvestment Entity (FIRE), tasked with collecting 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 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.

The base gas fee would increase 20-fold, from 60 gwei to 1,200 gwei, potentially raising 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 distributed its initial token supply to XRP holders in 2023 and has developed the FAssets system, which enables 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 and more than 887,000 active addresses.