In a bid to become a pioneer in protocol-level maximal extractable value capture, Flare has unveiled a governance proposal that promises to redirect revenue streams currently dominated by a handful of specialized actors. This shift would make Flare one of the first layer-1 blockchains to harness the potential of MEV, which is generated through the strategic reordering, insertion, or censorship of transactions within blocks.

Typically, this value is monopolized by external searchers and builders, who, in effect, impose a stealth tax on regular users through practices like front-running, sandwich attacks, and arbitrage. Estimates suggest that MEV revenues can reach tens of millions of dollars on certain networks, with Ethereum potentially generating upwards of $500 million and Solana reaching as high as $1 billion annually. Flare's proposal outlines a three-stage plan to integrate MEV revenues into its token economics.

Initially, block building responsibilities would transition from individual validators to a designated entity, with the option to revert to the current model if the designated builder becomes unavailable. The second stage involves moving block building into Flare Confidential Compute, enhancing the transparency and auditability of the process.

The final stage consolidates the builder and proposer roles into a single entity, reassigning validators to verification duties. Furthermore, the proposal introduces FIRE (Flare Income Reinvestment Entity), tasked with collecting revenues from various protocol sources, including fees from attestations, FAssets, Smart Accounts, confidential computing, and captured MEV. FIRE's primary objective is to decrease the FLR token supply through strategic buybacks and burns on the open market. Upon approval, several key changes would be implemented immediately.

The annual inflation rate of FLR tokens would decrease from 5% to 3%, with the hard cap being reduced from 5 billion to 3 billion tokens per year. Additionally, 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, based on current transaction volumes. Notably, even with this increase, the cost of a standard Flare transaction would remain a fraction of a cent. With its roots deeply embedded in the XRP ecosystem, Flare has previously distributed its initial token supply via an airdrop to XRP holders and has developed the FAssets system, which enables smart contract functionality for assets on blockchains that do not natively support it, such as the XRPL.

The FAssets system has successfully produced over 150 million FXRP. As of late March 2026, the Flare network reported a total value locked of over $160 million, with more than 887,000 active addresses, underscoring its growing presence in the blockchain landscape.