Firelight, an onchain cover-enablement protocol for DeFi, has launched cover on Lido Earn, providing vault-level protection for depositors against smart contract exploits and oracle failures. Lido Earn, which features DeFi vault products holding around $259 million in cryptoassets, now offers an additional layer of security beyond its existing first-loss mechanism funded by the Lido DAO. Firelight’s cover is independently reviewed and extends protection to the protocols where cryptoassets are deployed, setting a new standard for risk management in DeFi.
Marin Tvrdić, Strategy and Partnerships at Lido Earn, emphasized the importance of transparent risk protection, stating that yield alone is no longer sufficient. Firelight’s cover terms, including what is covered, the price, and the capacity, are published onchain before cover starts, ensuring clarity for users. The protocol names covered events in advance and uses an independent panel to validate exploit events, keeping the money behind a payout separate from the event that triggered it.
Firelight’s cover is already live on Sentora’s vaults and Kraken’s DeFi Earn, providing $30.5 million of cover. The protocol is audited by OpenZeppelin, Coinspect, and 0xMacro, with cover on Lido Earn going live on November 5th. Firelight is built to address the parts of crypto cover that users have learned not to trust, offering a transparent and verifiable protection layer for digital asset products.
Connor Sullivan, Chief Strategy Officer at Firelight, highlighted the growing need for safer and simpler DeFi solutions as the industry reaches beyond crypto natives. Firelight’s collaboration with Lido, a leading name in DeFi, aims to showcase how onchain earn products can better manage risk and protect depositors from day one.