Flare released a governance proposal on Thursday that would make it one of the first layer 1 blockchains to capture maximum extractable value (MEV) at the protocol level rather than letting it flow to the small number of specialized players who profit from the order of transactions in virtually all major chains.
MEV is the revenue that block builders extract by rearranging, inserting, or censoring transactions within a block. On most blockchains, this value is transferred to researchers and external constructors who effectively impose a hidden tax on ordinary users through sandwich attacks and foreground arbitrage.
External estimates put annual MEV revenues in the tens of millions on networks like Arbitrum, more than $500 million on Ethereum, and up to $1 billion on Solana. Flare’s three-step proposal would funnel revenue into the protocol’s own token economy.
In the first stage, block construction moves from individual validators to a designated constructor, initially managed by the Flare entity, with a fallback to the current model if the constructor is not available. In the second case, block construction is transferred to Flare Confidential Compute, making the process publicly auditable. The third step merges the builder and the submitter into a single entity, moving the existing validators into a verification role.
The proposal also creates FIRE, the Flare Income Reinvestment Entity, to collect revenue from multiple protocol sources, including attestation fees, FAsset and Smart account fees, confidential calculation fees, and captured MEV. FIRE’s primary mandate is to reduce the supply of FLR tokens through open market buybacks and burns.
Several changes would take effect immediately upon approval. Annual FLR inflation would drop from 5% to 3%, and the hard cap would be reduced from 5 billion to 3 billion tokens per year. A 20-fold increase in the base gas fee, from 60 gwei to 1,200 gwei, would increase FLR’s estimated annual consumption from around 7.5 million to 300 million at current transaction volumes. Even after the increase, a standard Flare transaction would only cost a fraction of a cent.
Flare has deep roots in the XRP ecosystem, having distributed its initial supply of tokens via an airdrop to XRP holders in 2023. Its FAssets system, which has produced over 150 million FXRP, is designed to bring smart contract functionality to assets on blockchains like
The network reports a total value locked of over $160 million as of the end of March 2026, with over 887,000 active addresses.
