Firelight Launches XRP Staking with Integrated DeFi Insurance on Flare Network

Firelight, a decentralized finance protocol built by Sentora and supported by the Flare Network, has officially launched a novel XRP staking mechanism that integrates a decentralized insurance layer for DeFi protocols. The platform allows XRP holders to stake their tokens, receiving liquid stXRP tokens in return, which are ERC-20 compatible and can be used across the Flare ecosystem for trading, collateral, or liquidity provision.

The staked XRP, in the form of wrapped FXRP created via Flare's decentralized FAssets system, backs a cover pool designed to underwrite risk for participating DeFi protocols. If a covered protocol suffers losses from an exploit or hack, this pool can provide compensation, functioning similarly to a traditional insurance model. Phase 2 of the project, slated for early 2026, will activate staking rewards, which will be directly linked to the demand and premiums paid by protocols for this coverage.

Connor Sullivan, Chief Strategy Officer at Firelight, emphasized the need for this infrastructure, stating, "At this stage in DeFi’s maturity, it needs the same risk infrastructure that supports every other financial market." The protocol aims to address the relatively low Total Value Locked (TVL) on the XRP Ledger, which stands at approximately $72 million, by providing new utility and yield opportunities for XRP.

To ensure security, Firelight has undergone audits by OpenZeppelin and Coinspect and has launched a bug bounty program in collaboration with Immunefi. The project also introduces Firelight Points to incentivize early user participation as it builds liquidity ahead of its full cover and rewards launch next year.