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Firelight raises $8 million to backstop DeFi vaults with staked XRP

Firelight says it will roll out its first cover integrations this month, after holding $76 million in staked XRP on Flare and operating in a bootstrapping phase.

Reported · Written up by our desk · DeFi

Firelight, a DeFi cover protocol that uses staked XRP to backstop vaults against exploits, raised $8 million in a seed round led by Gumi Cryptos Capital, with first cover integrations scheduled to go live this month.

According to The Defiant, onchain cover remains small versus the size of DeFi, with DefiLlama tracking $123.7 million across 27 insurance protocols against $88.3 billion in total value locked, or about 0.14%. Nexus Mutual makes up roughly 88% of that tracked cover capital.

Firelight’s model separates the staking collateral from the protocols being covered: staked XRP is bridged to Flare as FXRP via the FAssets system, stakers receive stXRP as a liquid staking token, and that pool is what pays out cover claims.

The protocol has been live on Flare since December in a bootstrapping phase that accepts deposits without cover attached, and it currently holds $76 million in staked XRP, up 20% over the past 30 days. Firelight also caps deposits at 65 million FXRP and says it will add BTC and XLM as backing assets, while noting that Firelight Coverage is not insurance and that claims are assessed by a consortium of five outside firms.

Latest closeBitcoin $77,351.59 ▼1.5%|XRP $1.352 ▼1.9%

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