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KLEA Crypto Daily: Monday, September 28, 2026
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Firelight Secures $8 Million to Enhance DeFi Vault Security with Staked XRP
Firelight, a cover protocol utilizing staked XRP to provide security for decentralized finance (DeFi) vaults, has successfully raised $8 million in a seed funding round led by Gumi Cryptos Capital. The protocol aims to address the significant gap in on-chain coverage, which currently protects only a small fraction of the total DeFi value locked, estimated at $88.3 billion. Firelight's innovative structure separates the capital backing its coverage from the protocols being insured, using staked XRP as the primary backing asset.
The funding round also saw participation from Maven 11, Metalayer, Joint Effects, and Tribe Capital. Firelight has been operational on the Flare network since December, during which it has accumulated $76 million in deposits, marking a 20% increase over the past month. This positions Firelight as the largest protocol on Flare, which has a total of $133 million locked across 39 protocols. The protocol plans to expand its backing assets to include Bitcoin (BTC) and Stellar (XLM).
Firelight's coverage model is designed to instill confidence among institutional investors by providing credible protection against smart contract and economic risks. The protocol's claims are validated by a consortium of five external firms, ensuring a separation between capital and adjudication. Covered events include smart contract exploits and governance attacks, with pricing based on real-time risk assessments. Firelight has also undergone audits by OpenZeppelin and Coinspect, and operates a bug bounty program through Immunefi.
In a related development, Firelight and Sentora announced that native coverage for Sentora's vaults will launch in September, moving from an earlier planned date in 2026. Sentora, formed from the merger of IntoTheBlock and Trident Digital, has facilitated over $3 billion in DeFi vault deployments. Anthony DeMartino, who leads both Firelight and Sentora, brings extensive experience from his previous roles in risk strategies at Coinbase and trading at major financial institutions.
Source: KLEA News