# Flare Proposes MEV Capture and 40% Inflation Cut Ahead of Vote

> Flare's new governance proposal would capture MEV at the protocol level, create a buy-and-burn entity called FIRE, and slash FLR inflation to 3%.

By Blockster Newsdesk · April 16, 2026

Canonical: https://blockster.com/flare-proposes-mev-capture-and-40-inflation-cut-ahead-of-vote

_Flare Network is drawing renewed attention from the crypto community as a major governance proposal heads to a vote starting tomorrow, April 11, with voting open through April 24._

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The proposal would fundamentally restructure how the network handles block building, capture maximal extractable value (MEV) at the protocol level, and cut annual token inflation by 40%.

If approved, [Flare](https://flare.network/) would become one of the first layer-1 blockchains to internalize MEV revenues — value that on most networks flows to a small number of specialized actors who profit from transaction ordering at the expense of ordinary users.

[Post from @FlareNetworks on X](https://twitter.com/FlareNetworks/status/2042226068493410727?s=20)

## What Is MEV and Why Does It Matter?

MEV refers to the revenue that block builders extract by reordering, inserting, or censoring transactions within a block. On most blockchains, this value is captured by external searchers and builders who effectively impose a hidden tax on users through front-running, sandwich attacks, and arbitrage.

External estimates place annual MEV revenues at tens of millions of dollars on networks like Arbitrum, upwards of **$500 million on Ethereum**, and as much as **$1 billion on Solana**. Flare's proposal aims to redirect that type of revenue back into the protocol's own token economics rather than leaving it on the table for third parties.

## A Three-Stage Block Building Overhaul

The [proposal lays out](https://www.coindesk.com/tech/2026/04/10/xrp-adjacent-flare-proposes-protocol-level-mev-capture-and-40-inflation-cut) a phased redesign of how blocks are constructed on Flare:

1. **Stage One:** Block building moves from individual validators to a designated builder, initially operated by the Flare Entity, with a fallback to the current model if the builder is unavailable.
2. **Stage Two:** Block building transitions into Flare Confidential Compute, making the process publicly auditable while preserving transaction privacy.
3. **Stage Three:** The builder and proposer roles merge into a single entity, shifting existing validators to a verification role.

This staged approach is designed to progressively decentralize and secure the MEV capture mechanism while minimizing disruption to the network.

[Post from @FlareNetworks on X](https://twitter.com/FlareNetworks/status/2044130792381587736?s=20)

## Introducing FIRE: Buy and Burn for FLR

Central to the proposal is the creation of **FIRE** — the **Flare Income Reinvestment Entity**. FIRE would collect revenue from multiple protocol sources and use it to conduct open-market buybacks and burns of **$FLR** tokens. Revenue streams feeding into FIRE would include:

- Captured MEV revenues
- Attestation fees
- FAsset and Smart Account fees
- Confidential compute fees

FIRE's primary mandate is straightforward: reduce the circulating supply of FLR over time through systematic burns funded by real protocol revenue.

## Immediate Changes Upon Approval

Several changes would take effect immediately if the proposal passes. Annual FLR inflation would drop from **5% to 3%**, with the hard cap reduced from 5 billion tokens per year to 3 billion.

The base gas fee would increase 20-fold, from 60 gwei to 1,200 gwei, raising the estimated annual FLR burn from roughly **7.5 million tokens to 300 million** at current transaction volumes.

[Post from @FlareNetworks on X](https://twitter.com/FlareNetworks/status/2044309814218572062?s=20)

Despite the gas fee increase, Flare notes that a standard transaction would still cost a fraction of a cent — keeping the network accessible for everyday use.

## Flare's XRP Roots and Network Growth

Flare has deep ties to the **XRP ecosystem**, having distributed its initial token supply through 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 XRPL that do not natively support it.

As of late March 2026, the network reports over **$160 million in total value locked** and more than **887,000 active addresses**, reflecting steady growth as the ecosystem matures.

## What's Next

With voting opening tomorrow and running through April 24, FLR holders will have a direct say in whether the network adopts one of the most ambitious tokenomics overhauls seen on a layer-1 blockchain.

The outcome could set a precedent for how other chains approach MEV — shifting it from a problem to be mitigated into a protocol-level revenue source.