What to Know:
- Firelight introduces XRP staking, allowing holders to earn rewards.
- The protocol offers on-chain protection against hacks for DeFi projects.
- Staked XRP backs a cover pool, providing payouts if protocols face losses.
Firelight is a new decentralized finance (DeFi) protocol offering staking opportunities for XRP holders and on-chain protection against hacks for other protocols. Built by Sentora and backed by Flare Network, Firelight allows XRP holders to stake their tokens to earn rewards tied to demand for DeFi “cover,” which helps protocols absorb losses from exploits. This initiative addresses a critical need for risk infrastructure within the rapidly growing DeFi sector.
Firelight’s system operates in two phases: users deposit XRP and receive stXRP, a liquid, ERC-20 token representing their stake, which can be traded or used in DeFi liquidity pools. Staked XRP then backs the Firelight cover pool, underwriting risk for participating DeFi protocols, mirroring traditional insurance models. Premiums from covered protocols fund staking rewards, creating a mutually beneficial ecosystem.
The protocol leverages Flare’s FAssets system to integrate XRP into DeFi, enabling users to mint FXRP, a wrapped form of XRP, without relying on centralized bridges. StXRP is minted using FXRP, providing a seamless on-ramp from XRP into Firelight’s staking system. Audited by OpenZeppelin and Coinspect, and supported by a bug bounty with Immunefi, Firelight prioritizes security and transparency.
This innovation arrives as the broader crypto market anticipates further regulatory developments and potential Bitcoin ETF approvals, all of which could spur additional growth in DeFi. By providing a means for XRP holders to earn yield and bolstering security within the DeFi space, Firelight is positioning itself as a key player in the evolving landscape. The project aims to bring DeFi closer to institutional standards.
Firelight offers a promising avenue for XRP holders to engage in staking while contributing to a more secure and resilient DeFi ecosystem. This approach could drive increased participation and innovation within the XRP and Flare communities. It also has the potential to set a new standard for risk management in decentralized finance.
Related: XRP Price: $12M Max Pain for Bears
Source: Original article
