Firelight Protocol Launches on Flare Network with DeFi Protection Cover

Firelight Protocol has officially launched on the Flare Network, offering onchain protection for DeFi vaults. The protocol, incubated by Sentora and developed by Sentinel Labs, provides a cover layer for DeFi vaults, addressing the growing gap between deployed capital and available protection. Currently, Firelight covers Sentora’s USD Protected Vault and Protected RWA Vaults, with plans to expand to other products like Veda and Upshift.

The protocol operates by allowing XRP holders to supply cover capital through Flare Smart Accounts. Stakers deposit FXRP into the Firelight Vault, with an aggregate deposit cap of $115 million in XRP. Firelight registers cover terms, pricing, and capacity onchain, and an independent Risk Consortium evaluates eligible events against predefined criteria. Covered events include smart contract exploits, oracle failures, and governance exploits.

Stakers earn protocol emissions in FXRP for providing economic security, though their deposits are subject to slashing. The first emissions will also reward early contributors based on Firelight Points earned during the protocol’s development. However, participants should be aware of the risks, including smart contract risks and the time required for unstaking and withdrawals.

Firelight’s contracts have undergone audits by OpenZeppelin, Coinspect, and 0xMacro, and the protocol completed a public bug bounty through Immunefi. The launch was supported by an $8 million seed funding round led by Gumi Cryptos Capital, with participation from Maven 11, Metalayer, and Tribe Capital.