Firelight Is Live, Backed by Staked FXRP on Flare

Firelight provides a shared protection layer for DeFi vaults. Beyond Sentora, Veda and Upshift are integrating it at the infrastructure layer, so any operator building on them can turn on protection for its own vaults.

Every covered vault draws on the same capital: a single Firelight Vault on Flare, where stakers deposit FXRP. XRP holders can now supply that capital through Flare Smart Accounts, where one signature from an XRPL wallet mints FXRP and deposits it.

The protection gap

Onchain capital increasingly sits in vaults, and protection for that capital has not grown at the same rate. Capital that backs onchain cover equals about 0.14% of the nearly $100 billion in DeFi. As more institutions allocate to DeFi, this gap matters more.

Firelight adds protection at the vault level. Depositors in a covered vault have cover without the need to research or buy a separate policy. Firelight registers cover terms onchain. An independent Risk Consortium of five firms (Hypernative, Native, Credora, Cyfrin, and GFX Labs) checks each event against criteria that Firelight publishes in advance.

What's live today

Firelight cover is built into two Sentora products:

• Sentora USD Protected Vault gives diversified access to USD-denominated strategies that run fully onchain on established DeFi protocols.
• Sentora Protected RWA Vaults run strategies built around real-world assets (RWAs), including leveraged looping and lending in markets that accept RWAs as collateral.

The strategies in both vaults run as before. Firelight adds verifiable onchain protection against defined protocol failures to the deposits in them.

Veda and Upshift are integrating Firelight at the infrastructure layer. Any operator that builds on Veda or Upshift can turn on protection for its own vaults, backed by the same Firelight Vault.

The capital behind the cover starts on Flare

In traditional insurance, one insurer takes on the risk under a contract. Firelight spreads that role across stakers. Stakers deposit FXRP into the Firelight Vault, which sits outside the protocols it covers, and the vault's capital backs the full portfolio of elected coverage.

XRP is the first capital in the vault. FAssets, part of Flare's core network infrastructure, makes XRP programmable on Flare as FXRP without a third-party bridge. The deposit cap for aggregate staked positions is now $115 million XRP. The asset, the infrastructure, and the coverage layer all sit on one network.

How cover works

Firelight registers the parameters, scope, price, and capacity of each cover onchain. The covered technical and economic events are named in advance: smart contract exploits, oracle failures, governance exploits, bad debt and depegs caused by mechanism failure, and redemption failures.

When an exploit is confirmed:

1. Firelight programmatically identifies every eligible active position in a covered vault within the affected market.
2. ZeroShadow, Firelight's designated security partner, publishes an exploit report.
3. The Risk Consortium independently validates the event, confirms the loss and publishes an onchain attestation.

The Consortium reviews every cover event before the protocol can release a payout. It checks each event against the published coverage criteria and authorizes it through a public onchain attestation.

Depositing through Flare Smart Accounts

Deploying XRP into Firelight through Flare Smart Accounts (FSA) requires only XRP. Connect a supported XRPL wallet and select mint and deposit. FSA mints FXRP (XRP wrapped on Flare) and deposits it into the Firelight Vault in one flow. This flow does not require FLR, and fees are charged in FXRP.

What that one signature does:

1. Your XRPL wallet sends XRP on the XRP Ledger, with your instruction attached.
2. Flare's Data Connector verifies the transaction.
3. FAssets mints FXRP 1:1 on Flare.
4. The FXRP is staked into Firelight, and stXRP is credited to your Flare smart account.

Your smart account is linked to your XRPL address, and only that address controls it.

In order to unstake and withdraw, initiate the process on the web app and wait for the unstaking period to elapse. As emissions accrue and cover is enabled, the unstaking window increases to match the 30-day coverage periods. Then withdraw to FXRP and redeem to XRP. The XRP goes back to the XRPL address that opened the position.

Start at fsa.flare.network

What stakers earn

Stakers provide economic security to the protocol, and their deposits are subject to slashing. In return, they receive a share of protocol emissions. Program operators pay fees to enable cover on their vaults, and these fees fund emissions. Emissions follow total protocol revenue, so they increase as operators enable more cover.

Emissions stream to stakers continuously in FXRP. Fees paid in USDC convert to FXRP and go into each staker's position automatically, which increases its redemption value over time.

The first protocol emissions also go to early contributors, in proportion to the Firelight Points each eligible address earned during the protocol's development, growth, and launch. Firelight will publish eligibility and claim details through its official channels in the coming days. Please treat claim links from other sources as scams.

The risks stakers take on

Firelight Coverage is not insurance. Staking into it means taking on risk so that depositors in covered vaults are protected.

• Your deposit backs cover and has no cover of its own. Stakers earn a share of protocol emissions in return for providing economic security to the protocol. Their staked capital is subject to slashing.
• Rewards carry the same risk. Compounded rewards stay in the vault, so slashing applies to them in the same way as to your original deposit.
• Exits take time. Deposits back 30-day coverage periods, so unstaking and withdrawals take longer than in Phase 1. Phase 1 positions convert automatically.
• Capacity is capped. Aggregate staked positions are capped at $115 million XRP.
• Each layer carries contract risk. Depositing through FSA relies on the FSA, FAssets, and Firelight contracts. Audits and monitoring reduce this risk, and some risk remains.

Read Firelight's docs before you deposit.

Built on strong foundations

Flare is the blockchain for data. Its enshrined protocols, the Flare Time Series Oracle and Flare Data Connector, make digital assets that settle elsewhere, starting with XRP, work in onchain finance. FXRP, the first FAsset, represents XRP 1:1 on Flare and has passed 150 million minted, with more than 90% deployed in onchain finance across seven networks. Firelight turns staked FXRP into onchain cover, backing protocols against exploits, oracle failure and bad debt.

Sentora's risk infrastructure supports Firelight. It applies more than 1,000 proprietary risk models across $2 billion in deployed assets and more than 300 monitored strategies. OpenZeppelin, Coinspect, and 0xMacro audited Firelight's contracts, and Firelight completed a public bug bounty through Immunefi.

Firelight raised $8 million in seed funding before launch. Gumi Cryptos Capital led the round, with participation from Maven 11, Metalayer, and Tribe Capital.

Get started

Cover across DeFi, capital that starts on Flare.

• Read Firelight's announcement: https://firelight.finance/articles/firelight-is-live-institutional-grade-cover-for-defi
• Stake through Flare Smart Accounts: https://fsa.flare.network
• How to stake XRP on Firelight with FSA: https://youtu.be/n1QQ1UgzfGc

FTSOBest analysis

What is live today?

• Cover products: Firelight protection is embedded in two Sentora vaults – the Sentora USD Protected Vault and the Sentora Protected RWA Vaults.
• Integration path: Veda and Upshift are adding Firelight at the infrastructure layer, meaning any operator building on those platforms can turn on cover for its own vaults.
• Capital source: Stakers provide FXRP (the FXRP FAsset that represents XRP 1:1 on Flare) through Flare Smart Accounts (FSA). One signature from an XRPL wallet triggers:
  1. XRP transfer on the XRP Ledger.
  2. Verification by Flare’s Data Connector.
  3. Minting of FXRP via the FAssets contract.
  4. Staking of the FXRP into the Firelight Vault and crediting of stXRP to the user’s smart account.
• Capacity: The aggregate staked amount is capped at $115 million XRP.
• Risk governance: A Risk Consortium (Hypernative, Native, Credora, Cyfrin, GFX Labs) reviews each claim. The designated security partner ZeroShadow publishes an exploit report; the consortium validates the loss and records an on‑chain attestation before any payout is released.
• Reward model: Fees paid by vault operators to enable cover are converted to FXRP and streamed continuously to stakers as protocol emissions. Early contributors receive additional emissions based on Firelight Points earned during development.
• Audits & bounty: Contracts were audited by OpenZeppelin, Coinspect, and 0xMacro, and a public bug bounty was run on Immunefi.

Technical interpretation

• Shared risk pool – Unlike traditional insurance where a single insurer underwrites a policy, Firelight spreads risk across all FXRP stakers. The pool sits in a separate vault, isolated from the covered protocols, which reduces direct contagion.
• On‑chain policy definition – Cover terms (scope, price, capacity) are registered on‑chain, providing transparent, tamper‑evident documentation of what events are covered.
• Liquidity flow – Fees collected in USDC are swapped to FXRP before reaching stakers, meaning the reward token matches the capital token, simplifying accounting.
• Unstaking delay – Since each deposit backs a 30‑day coverage period, unstaking can only occur after the corresponding window has elapsed, aligning liquidity risk with coverage duration.
• Dependency stack – Firelight relies on:
  • FAssets for the FXRP token,
  • Flare Smart Accounts for the mint‑and‑deposit UX,
  • Flare Data Connector for cross‑chain transaction verification,
  • Risk Consortium and ZeroShadow for claim adjudication. Any failure or delay in these components could affect both cover availability and staker returns.

Practical impact for the community

• For end‑users – Depositing into a supported vault now automatically includes cover against a defined set of failures. No extra policy purchase or separate treasury management is required.
• For vault operators / builders – Operators pay fees to enable cover on their vaults. The architecture allows a single capital pool to protect many independent strategies, reducing the need for each protocol to secure its own insurance.
• For the Flare network – The launch creates concrete usage of the FXRP FAsset and showcases the Flare Smart Accounts flow, potentially encouraging further cross‑chain asset onboarding.

Dependencies & risk points

• FXRP (FAsset)
  • Role: Capital token minted 1:1 from XRP
  • Known risk / open question: Bridge‑free design reduces counter‑party risk, but the mint‑burn mechanism is still governed by smart contracts that could be vulnerable.
• Flare Smart Accounts
  • Role: UX for minting & staking FXRP
  • Known risk / open question: Relies on correct operation of the FSA contracts and the Data Connector; contract upgrades or bugs could interrupt deposits/withdrawals.
• Risk Consortium
  • Role: Claim validation
  • Known risk / open question: Governance model (selection, incentives, potential collusion) is not detailed in the source; how disputes are resolved is an open question.
• ZeroShadow
  • Role: Exploit reporting
  • Known risk / open question: Independent verification is assumed, but the timeliness and completeness of reports affect payout speed.
• Emission model
  • Role: Staker rewards
  • Known risk / open question: Emissions are tied to protocol revenue; if vault adoption slows, reward rates may drop, impacting staker incentives.
• Capacity cap ($115 M)
  • Role: Upper bound on total FXRP that can be staked
  • Known risk / open question: Unclear how the cap will be adjusted upward or what happens if demand exceeds the cap.

All statements above are derived from the supplied source. No additional commitments, timelines, or metrics have been invented.