XRP is expanding its role in decentralized finance by backing a protection system for investment vaults. Firelight, a protocol for managing onchain coverage, has activated vault protection on Flare, a blockchain supporting smart contracts built on XRP Ledger infrastructure.
Sentora, a platform managing decentralized finance investments, has enabled the service on its USD Protected Vault and Protected RWA Vaults. RWA stands for real-world assets represented on a blockchain. The coverage operates within preset limits and applies to depositors in selected products without requiring a separate policy purchase.
How the Staking System Works
The backing comes from FXRP, a representation of XRP on Flare. XRP holders deposit FXRP through Flare Smart Accounts and receive stXRP as a receipt token. Participants earn protocol rewards funded by operator fees, with distributions automatically compounding into staking positions.
Staked funds remain subject to slashing, meaning the protocol can reduce holdings if a confirmed covered event occurs. Participants retain this exposure until they fully exit the withdrawal queue, which now reflects the protocol's 30-day coverage periods.
Participation had already reached more than 50 million XRP staked in March. This activation represents a phased rollout that began in December 2025, when Firelight introduced its XRP staking system.
What Coverage Includes
Eligible incidents are recorded in advance and include software exploits, oracle failures affecting external data feeds, attacks on governance systems, mechanism failures causing unpaid borrowing obligations, depegs when tokens lose their target values, and redemption failures.
Five independent firms validate covered events before payouts: Hypernative, Native, Credora, GFX Labs, and Cyfrin. Zeroshadow, Firelight's security partner, publishes exploit reports that inform the validation process.
Market Context
Firelight cited a 39% annual increase in curated vault assets and a near-tripling of oracle attacks in the current year. The organization noted that onchain cover backing represents just 0.14% of the $88.3 billion locked in DeFi, highlighting a significant gap between deployment and available loss funding.
Sentora reported $2.8 billion in aggregate vault value across more than 300 strategies at the time of the announcement. The project has been audited by Openzeppelin and maintains an $8 million funding round led by Gumi Cryptos Capital, which also included participation from Tribe Capital and Maven 11.
