Firelight Finance launched an XRP staking protocol on the Flare network Tuesday, introducing a liquid token called stXRP designed to earn rewards through a DeFi insurance model that aims to protect protocols against hacks and failures.
The launch represents Phase 1 of the rollout, allowing users to bridge XRP to Flare through the FAssets system, deposit FXRP into Firelight, and receive stXRP on a 1-to-1 basis. The token can already move across the Flare ecosystem, including on decentralized exchanges, lending protocols, and liquidity pools, but staking rewards are not active yet.
Staking Rewards and DeFi Insurance Model
Firelight expects rewards to begin in Phase 2, planned for early 2026, if DeFi protocols adopt the insurance model and pay fees for coverage. Chief Strategy Officer Connor Sullivan, formerly at Fireblocks, stated the design borrows the restaking concept but applies it differently from early Ethereum-based attempts like EigenLayer.
Sullivan explained the main issue with earlier restaking frameworks was the cost of capital. Firelight focuses on assets with structurally lower capital costs, narrows in on DeFi cover and insurance for top-tier protocols where proper risk modeling matters, and rethinks incentives through short, transparent points programs tied to real participation and economic value.
Participants in the initial vault will receive Firelight Points, intended to reward early protocol participation ahead of the Phase 2 launch. The broader goal is giving XRP holders a way to earn staking rewards while offering DeFi protocols an insurance layer, but the model only works if protocols actually choose to purchase this cover.
Incubation and Support
Firelight is incubated by Sentora, formed through the merger of IntoTheBlock and Trident Digital, and supported by the Flare network, which provides the underlying infrastructure. Both are backed by Ripple and aim to build out XRP's role in DeFi applications.
Sullivan stated Sentora has worked with major DeFi protocols through risk-management strategies and liquidity programs, supporting billions of dollars in total value locked. The firm's clients are institutions looking to earn yield through DeFi, and one of the biggest hurdles they face is the absence of this specific cover primitive, which Sullivan described as an essential feature rather than a “nice-to-have.”
Protocol Integration and Claims Process
Firelight is in active discussions with several DeFi protocols about integrating the cover system. If protocols adopt it, they will pay fees to purchase protection backed by the pooled FXRP inside Firelight, with a portion of those fees distributed to XRP stakers as rewards. Although built on Flare, the system is chain-agnostic, meaning any protocol on any chain can integrate with Firelight and purchase cover.
If a covered incident occurs, a claim would be submitted by an appointed agent and reviewed by an independent consortium. If approved, payouts are executed automatically through on-chain contracts, according to the technical documentation.