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Firelight Introduces XRP Staking for DeFi Insurance Layer Against Exploits

2025/12/04 00:52
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Firelight Introduces XRP Staking for DeFi Insurance Layer Against Exploits

The new protocol, developed by Sentora and Flare Network, aims to combine XRP yield opportunity with offering protection against DeFi hacks.

By Krisztian Sandor, AI Boost|Edited by Oliver Knight
Updated Dec 3, 2025, 5:02 p.m. Published Dec 3, 2025, 4:52 p.m.
XRP (CoinDesk)

What to know:

  • Firelight, a new DeFi protocol, allows XRP holders to stake tokens and earn rewards while providing onchain protection against hacks.
  • Built by Sentora and backed by Flare Network, Firelight introduces a capital-efficient protection layer to enhance DeFi's resilience.
  • The protocol uses Flare’s FAssets system to integrate XRP into DeFi, offering a new yield-earning opportunity for XRP holders.

Firelight, a new decentralized finance (DeFi) protocol, is bringing staking to XRP users, while offering protocols a form of onchain protection against hacks.

Built by Sentora and backed by Flare Network, Firelight lets XRP holders stake their tokens to earn rewards tied to demand for DeFi "cover," protection that can help protocols absorb losses from exploits, the protocol said in a Wednesday press release

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The concept is similar to insurance in traditional finance, an area where the $160 billion DeFi sector still lags with billions of dollars lost in exploits and hacks hindering broader adoption.

"At this stage in DeFi’s maturity, it needs the same risk infrastructure that supports every other financial market," Connor Sullivan, chief strategy officer at Firelight, said in a statement. "Firelight introduces a capital-efficient protection layer that can absorb shocks, reduce technical and economic risk and make the entire ecosystem more resilient."

The system works in two phases, the company explained. First, users deposit XRP and receive stXRP, a liquid, ERC-20 token that represents their stake. StXRP can be traded, used as collateral or added to DeFi liquidity pools within the Flare ecosystem. In the second phase, that staked XRP will back the Firelight cover pool, meaning the deposited funds are used to underwrite risk for DeFi protocols that opt in.

If a protocol experiences a loss and meets Firelight’s criteria, the pool can pay out from the capital staked by users. This mirrors the way insurers use collected premiums and reserves to pay claims. Premiums paid by covered protocols help fund staking rewards.

Firelight relies on Flare’s FAssets system to bring XRP into DeFi. FAssets are fully decentralized synthetic versions of layer-1 tokens, allowing users to mint FXRP — a wrapped form of XRP — without needing to trust centralized bridges. StXRP is minted using FXRP, providing a direct on-ramp from XRP into Firelight’s staking system.

The protocol has completed audits by OpenZeppelin and Coinspect and launched a bug bounty with Immunefi.

While XRP is one of the most widely held cryptocurrencies boasting a $130 billion market capitalization, it has yet lacked native staking options, the protocol said. Total value locked on XRPL stands at just $72 million, according to DefiLlama.

Firelight aims to give holders a new way to earn yield while supporting a security layer that could help DeFi move closer to institutional standards.

Read more: Risk, Reward, and Resilience: Building Insurance Primitives in DeFi

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AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk's full AI Policy.

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