$8M Funding Boost for Firelight Protocol to Expand DeFi Risk Protection

Firelight Protocol has secured $8 million in a seed funding round to expand its decentralized finance (DeFi) risk protection beyond XRP. The funding was led by Gumi Cryptos Capital, with participation from Maven 11, Metalayer, Joint Effects, and Tribe Capital.

The company plans to launch an on-chain protection layer designed to cover DeFi users against losses linked to the protocol, smart contracts, and economic risks.

Firelight estimates that $80 billion is locked across DeFi, but only a small portion has access to on-chain coverage. Currently, about 0.14% of DeFi capital is covered, with Nexus Mutual accounting for roughly 88% of the tracked coverage capital.

The company's XRP staking system involves users depositing XRP, which is bridged to Flare as FXRP. In return, users receive stXRP, a liquid staking token.