The push to give XRP a meaningful role in DeFi just took a serious step forward. Firelight has launched a new XRP staking protocol on the Flare network, introducing stXRP, a liquid token designed to power a future onchain insurance economy. The launch marks the beginning of a phased rollout, and while rewards aren’t live yet, the foundations for a new use case around restaking, cover, and institutional-grade protection are already in motion.
What Exactly Did Firelight Launch?
This first phase is all about bootstrapping liquidity. Users can bridge their XRP to Flare using the FAssets system, convert it into FXRP, and stake it inside Firelight. In return, they receive stXRP on a one-to-one basis. This stXRP behaves like a liquid receipt and is already usable across the Flare ecosystem, from DEXs to lending markets and liquidity pools.
What’s missing right now is the yield. Staking rewards will only start in Phase 2, currently planned for early 2026. Those rewards depend entirely on whether DeFi protocols choose to purchase onchain insurance cover through Firelight and pay fees for that protection. In other words, the staking incentives aren’t inflationary. They are meant to come directly from real economic activity.
A Different Take on Restaking
Firelight borrows the core idea behind restaking — reuse capital to secure more applications — but Connor Sullivan, Firelight’s chief strategy officer and former Fireblocks exec, argues that Ethereum’s early experiments suffered from high capital costs. Competing with ETH yields pushed projects into economic contortions that weren’t sustainable.
Firelight flips the model by using assets that don’t have aggressive native yield expectations. XRP fits that bill. Instead of trying to attract capital with high APYs, Firelight focuses on a very narrow, high-value use case: DeFi insurance for blue-chip protocols. Sullivan frames it as a simple equation: lower cost of capital, tighter scope, and incentives tied to real participation and real revenue.
That’s the design philosophy behind stXRP. It stays liquid. It can move across applications. And it represents staked capital that could eventually back protection against hacks, smart-contract failures, and protocol outages.
How stXRP Fits Into DeFi Insurance
The broader vision is to create a pooled insurance layer that DeFi protocols can tap into. If a protocol wants cover, it can buy it through Firelight. The fees it pays are then redistributed to stXRP holders as rewards. If something does go wrong, an independent consortium reviews the claim and, if valid, the payout is executed automatically through smart contracts.
This isn’t limited to Flare or the XRP Ledger. Sullivan stressed that the cover module is chain-agnostic. Any protocol, on any chain, could integrate Firelight’s insurance primitive and buy protection backed by the pooled FXRP inside the system.
This is where Sentora enters the picture. Sentora incubates Firelight and brings deep experience in risk modelling and institutional liquidity programs. Backed by Ripple and heavily integrated into Flare’s infrastructure, the team has already worked with major DeFi platforms managing billions in TVL. According to Sullivan, one of the biggest gaps those institutions highlight is the lack of a proper cover primitive. Firelight aims to fill that gap.
What Users Get in Phase 1
Even though rewards haven’t started, early supporters aren’t left empty-handed. Participants in the initial vault receive Firelight Points, a program meant to recognise early participation ahead of the Phase 2 insurance launch.
stXRP itself is already useful, with cross-ecosystem liquidity from day one. And the fact that Firelight’s payout logic is handled through onchain contracts adds a layer of transparency that traditional insurance models usually lack.
What Happens in Phase 2
Phase 2 is where this becomes a real yield-generating product. Once enough liquidity is established and DeFi protocols begin purchasing coverage, rewards flow back to stakers. Sullivan didn’t share a target APR range but said the goal is to strike a fair balance between staker incentives and what protocols can realistically pay for cover.
The team is currently focused on building the liquidity and integrations needed to make the cover module viable at scale. That step is essential. The entire model works only if protocols truly adopt insurance, not as a marketing checkbox but as a financial safety net they’re willing to pay for.
Firelight’s launch marks one of the most deliberate attempts yet to give XRP a functional role in DeFi beyond payments and liquidity bridging. By tying staking rewards to real insurance fees rather than emissions, Firelight is trying to build an economic loop with genuine demand behind it.
The big question now is adoption. If protocols buy the cover, stXRP becomes a productive asset. If they don’t, the model stalls. Firelight has the tech, the backing, and institutional relationships through Sentora. Phase 2 will show whether DeFi is finally ready to treat insurance as something essential, not optional.
If this works, XRP holders could find themselves participating in one of the more practical, revenue-driven staking models in the ecosystem.