In a bid to revolutionize the blockchain landscape, Flare has put forth a governance proposal that would make it a pioneer in capturing maximal extractable value (MEV) at the protocol level. This move would redirect MEV revenue away from a select group of specialized actors who currently reap the benefits of transaction ordering across major chains. MEV refers to the revenue generated by block builders through reordering, inserting, or censoring transactions within a block, effectively imposing a hidden tax on ordinary users. According to external estimates, annual MEV revenues can reach tens of millions on networks like Arbitrum, over $500 million on Ethereum, and up to $1 billion on Solana.

Flare's proposal outlines a three-stage plan to channel MEV revenue into the protocol's token economics. The first stage involves transferring block building from individual validators to a designated builder operated by the Flare Entity, with a fallback to the current model if the builder becomes unavailable.

The second stage moves block building to Flare Confidential Compute, making the process publicly auditable. The third stage merges the builder and proposer into a single entity, shifting existing validators to a verification role. Additionally, the proposal introduces FIRE, the Flare Income Reinvestment Entity, which will 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 decrease the FLR token supply through open-market buybacks and burns.

Upon approval, several changes would take effect immediately. Annual FLR inflation 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, would raise the estimated annual FLR burn from approximately 7.5 million to 300 million at current transaction volumes. Notably, even with the increase, a standard Flare transaction would cost only a fraction of a cent.

Flare's roots in the XRP ecosystem run deep, having distributed its initial token supply through an airdrop to XRP holders in 2023. Its FAssets system has produced over 150 million FXRP, aiming to bring smart contract functionality to assets on blockchains like XRPL that do not natively support it. As of late March 2026, the network boasts over $160 million in total value locked, with more than 887,000 active addresses.