Flare published 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 allowing it to flow to the small number of specialized players that profit from transaction orders on virtually all major chains.
MEV is the revenue that block builders extract by reordering, inserting or censoring transactions within a block. In most blockchains, this value flows to third-party finders and builders that effectively impose a hidden tax on ordinary users through sandwich attacks and arbitrage.
External estimates put MEV’s annual revenue in the tens of millions on networks like Arbitrum, over $500 million on Ethereum, and up to $1 billion on Solana. Flare’s three-stage proposal would route 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 return to the current model if the constructor is not available. In the second, the block construction moves to Flare Confidential Compute, making the process publicly auditable. The third stage merges the creator and the proposer into a single entity, shifting the existing validators into a verification role.
The proposal also creates FIRE, the Flare Revenue Reinvestment Entity to collect revenue from multiple protocol sources, including certification fees, FAsset and Smart Account fees, confidential computing 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 cap would be reduced from 5 billion to 3 billion tokens per year. A 20-fold increase in the basic gas tariff, from 60 gwei to 1,200 gwei, would increase FLR’s estimated annual consumption from approximately 7.5 million to 300 million at current transaction volumes. Even after the increase, a standard Flare transaction would cost a fraction of a cent.
Flare has deep roots in the
The network reports over $160 million in total value locked as of the end of March 2026, with over 887,000 active addresses.
