The newly launched Firelight Protocol is set to expand the utility of XRP by introducing native staking rewards and a novel mechanism for securing decentralized finance (DeFi) assets. The protocol establishes an onchain economic security primitive that utilizes staked XRP to provide coverage against exploits and hacks for external DeFi protocols.
This move is significant as XRP, despite being one of the largest crypto assets by market capitalization, has lacked native staking or yield opportunities. Firelight directly addresses a major institutional bottleneck: the lack of robust insurance in DeFi. While the sector has seen explosive growth—previously surpassing $170 billion in total value locked (TVL)—it continues to lose over $1 billion annually to exploits.
In traditional finance, insurance is an embedded component of market stability. Firelight is designed to close this gap by providing institutional-grade DeFi cover. The genuine, growing demand for this protection is expected to drive significant value and rewards back to XRP holders who participate in staking.
According to a media release, Firelight will enable XRP integration into DeFi through a two-phase rollout. Under the first phase 1, XRP holders can deposit their assets to receive stXRP, a 1:1 fully backed, ERC-20 compliant liquid vault token. stXRP acts as a transferable receipt that can be freely used across the Flare DeFi ecosystem, serving as collateral, being swapped on decentralized exchanges (DEXs), or contributing to liquidity pools.
Security and Industry Backing
Early participants in this phase will also be eligible to earn Firelight Points. Under Phase 2, the protocol will fully activate its core mechanism, where staking capital is used exclusively to back DeFi cover contracts. This provides a high-impact, utility-driven use case with real market demand, ensuring sustainable rewards for stakers.
The protocol has prioritized security, having completed three independent audits at launch: one by Openzeppelin, one by Coinspect, and a bug bounty program supported by Immunifi. Firelight is incubated by Sentora and backed by Flare Network, which provides the secure on/off-ramp for XRP via its decentralized FAssets bridging mechanism.
Both organizations are backed by Ripple and share the mission of expanding XRP’s utility in the DeFi space, providing deep technical support for long-term growth.
- What is Firelight Protocol? A new platform bringing native staking rewards and DeFi security cover to XRP holders.
- How does it benefit XRP users? Staked XRP earns rewards while backing insurance-like protection for DeFi protocols.
- What are the launch phases? Phase 1 issues stXRP tokens for use in Flare DeFi; Phase 2 activates staking-backed cover.
- How secure is Firelight? The protocol completed audits by Openzeppelin and Coinspect, plus a bug bounty with Immunifi.
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