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Firelight raises $8M to expand DeFi coverage beyond XRP
The Flare-based protocol wants to make smart-contract risk less terrifying for fintechs and institutions by building an on-chain insurance layer.
Firelight Protocol, a decentralized coverage platform built on the Flare Network, has closed an $8 million seed round as it prepares to extend its risk protection services well beyond its original XRP-focused roots. The round was led by Gumi Cryptos Capital, with Maven 11, Metalayer, Joint Effects, and Tribe Capital also participating.
From liquid staking to full coverage
Firelight launched its first phase in December 2025, introducing liquid staking capabilities using FXRP, the wrapped version of XRP that lives on Flare’s FAssets ecosystem. Staked FXRP blew past $67 million, with demand so persistent that the team had to raise its caps multiple times.
Phase 2 will layer active coverage mechanisms on top of the staking infrastructure. Users who stake collateral will effectively underwrite risks for other participants, earning yield in exchange for backing protection against smart-contract failures and slashing events.
The coverage marketplace will operate entirely on-chain, meaning pricing and terms are transparent. An independent Risk Consortium, which includes GFX Labs and Credora among its members, will evaluate claims within 10 days.
Beyond XRP: Bitcoin and Stellar in the pipeline
A partnership with Lombard, announced in May 2026, will bring Bitcoin exposure through LBTC, Lombard’s liquid Bitcoin staking token. Stellar’s XLM is also on the roadmap.
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The institutional trust problem
Firelight was incubated by Sentora, a firm backed by thousands of risk models and billions in active strategies. The protocol is non-custodial at the smart-contract layer, meaning it never takes direct control of user funds. It has undergone multiple audits and runs public bug bounties.
What to watch
The real test comes with Phase 2’s launch. Converting $67 million in staked FXRP into an active coverage marketplace requires getting two sides of a market to show up simultaneously: people who want protection and people willing to underwrite it.
Nexus Mutual, InsurAce, and Neptune Mutual all offer variations on DeFi coverage. What separates Firelight is its multi-chain collateral approach and the institutional credibility that Sentora’s involvement lends.