In a groundbreaking move, Flare has put forth a governance proposal that would enable the network to capture maximal extractable value at the protocol level, thereby redirecting revenue from external actors to its own token economy. This approach would make Flare one of the pioneering layer-1 blockchains to achieve this feat.
Maximal extractable value refers to the revenue generated by block builders through reordering, inserting, or censoring transactions within a block. Currently, this value is largely funneled to external searchers and builders, who, in turn, impose a hidden tax on ordinary users via front-running, sandwich attacks, and arbitrage. Estimates suggest that annual MEV revenues can reach tens of millions of dollars on networks like Arbitrum, upwards of $500 million on Ethereum, and as high as $1 billion on Solana. Flare's proposal is designed to route this revenue into its own token economics through a three-stage process.
The first stage involves transferring block building responsibilities from individual validators to a designated builder, initially operated by the Flare Entity, with a fallback mechanism in place in case the builder is unavailable. The second stage would relocate block building to Flare Confidential Compute, making the process publicly auditable. The final stage would merge the builder and proposer into a single entity, reassigning existing validators to a verification role. Additionally, the proposal introduces FIRE, the Flare Income Reinvestment Entity, which would collect revenue from various protocol sources, including attestation fees, FAsset and Smart Account fees, confidential compute fees, and captured MEV.
The primary objective of FIRE is to decrease 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 to 3% from 5%, and the hard cap would be reduced to 3 billion tokens per year from 5 billion.
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. Notably, even with this increase, the cost of a standard Flare transaction would remain a fraction of a cent. Flare has strong ties to the XRP ecosystem, having distributed its initial token supply through an airdrop to XRP holders in 2023.
Its FAssets system has produced over 150 million FXRP and is designed to bring smart contract functionality to 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.