In a bid to become one of the first layer-1 blockchains to harness maximal extractable value (MEV) at the protocol level, Flare has unveiled a comprehensive governance proposal. This move is designed to redirect MEV, currently dominated by a select group of specialized actors who profit from manipulating transaction sequences across major chains, into the protocol's own token economy. 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 ordinary users through practices like front-running, sandwich attacks, and arbitrage. Estimates suggest that MEV revenues reach tens of millions of dollars on networks such as Arbitrum, exceed $500 million on Ethereum, and could be as high as $1 billion on Solana.

Flare's proposal is structured into three stages, aiming to integrate MEV revenue into its token economics. Initially, block building will transition from individual validators to a designated builder operated by the Flare Entity, with a fallback mechanism to the current model if the builder becomes unavailable.

The second stage involves moving block building into Flare Confidential Compute, making the process publicly auditable. The final stage merges the builder and proposer into a single entity, transitioning existing validators to a verification role.

Additionally, the proposal introduces FIRE (Flare Income Reinvestment Entity), designed to 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 will be implemented immediately. The annual FLR inflation rate will decrease from 5% to 3%, with the hard cap reduced from 5 billion to 3 billion tokens per year.

A significant 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 this increase, the cost of a standard Flare transaction will remain a fraction of a cent. With its roots deeply embedded in the XRP ecosystem, Flare has previously distributed its initial token supply through an airdrop to XRP holders in 2023.

Its FAssets system has successfully produced 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, underscoring its growing presence in the blockchain landscape.