In a recent governance proposal, Flare has outlined a plan to become one of the first layer-1 blockchains to capture maximal extractable value (MEV) directly at the protocol level. This approach would redirect MEV revenue, which is currently dominated by a small group of specialized actors, back into the protocol's token economy. MEV refers to the income generated by block builders through the strategic ordering of transactions within a block, often resulting in a hidden tax on regular users.
The proposal consists of three stages, starting with the transfer of block building responsibilities from individual validators to a dedicated builder operated by the Flare Entity, followed by the integration of block building into Flare Confidential Compute for enhanced transparency. The final stage involves merging the builder and proposer roles into a single entity, transitioning existing validators to a verification capacity.
Additionally, the proposal introduces the Flare Income Reinvestment Entity (FIRE), tasked with collecting revenue from various protocol sources, including fees from attestation, FAsset, Smart Accounts, confidential computing, and captured MEV, to buy back and burn FLR tokens. Upon approval, several changes would be implemented immediately, including a reduction in annual FLR inflation from 5% to 3%, lowering 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, significantly 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, having distributed its initial token supply via an airdrop to XRP holders in 2023, Flare's FAssets system has facilitated the creation of 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.