XRP holders can now earn staking rewards and contribute to decentralized finance (DeFi) protection thanks to the launch of Firelight Protocol on the Flare Network.
Key Takeaways
- Firelight introduces native XRP staking for the first time, using a secure, audited system built on Flare Network.
- stXRP, a liquid staking token, allows XRP holders to earn rewards while participating in DeFi insurance.
- The protocol addresses DeFi’s $1 billion annual exploit losses by underwriting insurance with staked XRP.
- Institutional interest is rising as Firelight offers real economic utility for XRP within a secured DeFi ecosystem.
What Happened?
Firelight Protocol has officially launched its XRP staking system on the Flare Network, transforming the long-idle asset into a yield-generating and risk-covering instrument for DeFi. The project introduces a liquid staking token called stXRP, which is set to play a key role in underwriting insurance for decentralized protocols.
🔥 Firelight is LIVE → https://t.co/QT8qYUKDd2
— Firelight (@Firelightfi) December 3, 2025
A new era of economic security begins today.
We’re unlocking $XRPs full utility in DeFi and opening the door to scalable, on-chain protection.
Learn more about our vision: https://t.co/4L4pELkXWA pic.twitter.com/9iqn2MTT4r
Firelight Transforms XRP into a DeFi Powerhouse
XRP has always been among the top crypto assets by market cap, but until now, it lacked a native way to generate yield. Firelight changes that by introducing a two-phase system that turns XRP into a productive onchain asset.
In Phase 1, users can deposit wrapped XRP (FXRP) into Firelight vaults via Flare’s decentralized bridging system. In return, they receive stXRP, a 1:1 liquid, ERC-20 compatible token. This token serves as proof of deposit and can be used across the Flare DeFi ecosystem. It can be traded, used as collateral in lending markets, or added to liquidity pools.
Early participants also earn Firelight Points, giving added incentive for adoption and rewarding those who engage with the system at its foundational stage.
Phase 2 will roll out the protocol’s most impactful feature: DeFi insurance powered by staked XRP. All capital within the protocol will back onchain insurance contracts, helping to protect DeFi protocols from smart contract failures, hacks, and other security incidents. As demand for insurance grows, the rewards will be distributed to stakers, creating a feedback loop between DeFi risk, protection, and yield.
Prioritizing Security and Institutional Standards
Firelight was incubated by Sentora and is powered by Flare Network, utilizing Flare’s FAssets system to securely onboard XRP into the DeFi space. Unlike many cross-chain solutions, FAssets are fully decentralized and have undergone extensive audits to ensure secure interoperability.
At launch, Firelight completed:
- Three independent security audits, including reviews by OpenZeppelin and Coinspect.
- A bug bounty program via Immunefi, encouraging white-hat contributions.
- Full integration with Flare’s secure asset issuance framework.
This attention to detail has already attracted interest from institutional players, who see the lack of robust DeFi insurance as a major obstacle to deeper participation.
Institutional Demand Meets Onchain Utility
Traditional finance systems have long relied on insurance as a core stabilizing mechanism. DeFi, however, remains underinsured, with over $1 billion lost annually to various exploits despite $170 billion in total value locked.
Firelight directly tackles this challenge by giving XRP a clear, utility-driven purpose: backstop DeFi with real economic guarantees. This kind of real-world value proposition moves XRP beyond its original use case of cross-border payments and into a new frontier of financial infrastructure.
CoinLaw’s Takeaway
I think this is one of the most exciting upgrades to XRP’s utility we’ve seen in years. For too long, XRP holders have had to sit on a top-tier asset with almost no way to earn passive yield without venturing into questionable platforms. Firelight fixes that. In my experience, security is everything when it comes to staking protocols, and Firelight’s triple audit and bug bounty show they’re taking it seriously. The fact that staking rewards are tied to real DeFi risk coverage rather than inflation or gimmicks? That’s a big deal. I found the use of stXRP as both a reward and a tool across DeFi to be an elegant solution that could really catch on.
