In a bid to capture maximal extractable value at the protocol level, Flare has unveiled a three-stage governance proposal. This innovative approach would redirect MEV revenue, currently dominated by specialized actors, into the network's token economics.
MEV refers to the revenue generated by reordering, inserting, or censoring transactions within a block, often resulting in a hidden tax on users. By implementing this proposal, Flare would become one of the first layer-1 blockchains to tackle MEV at its core. The plan involves transitioning block building from individual validators to a designated entity, making the process publicly auditable through Flare Confidential Compute, and eventually merging the builder and proposer roles.
A new entity, FIRE, would be established to collect revenue from various protocol sources, including MEV, and utilize it to buy back and burn FLR tokens, thereby reducing the token supply. Upon approval, several key changes would take effect, including a reduction in annual FLR inflation from 5% to 3%, a lowered hard cap, and a significant increase in the base gas fee. This increase would, in turn, raise the estimated annual FLR burn from approximately 7.5 million to 300 million, all while maintaining a low transaction cost. With its roots in the XRP ecosystem and a proven track record, including the successful distribution of its initial token supply and the creation of over 150 million FXRP through its FAssets system, Flare's network boasts over $160 million in total value locked and more than 887,000 active addresses as of late March 2026.