Firelight Raises $8 Million to Ease DeFi Hack Risks

Decentralized finance has broadened access to on-chain lending and trading, but repeated smart-contract exploits have made loss recovery a central concern for fintech companies and institutional investors. Firelight is developing a protection protocol intended to accelerate recoveries after DeFi hacks, using crypto assets supplied by participants as backing. The model seeks to make decentralized markets less risky for financial firms while offering asset holders another way to earn yield.

Firelight said in its latest announcement that it raised $8 million to expand the protocol beyond its XRP roots and into a broader multichain market. Holders of XRP, bitcoin and Stellar’s XLM will be able to provide backing for the protection system and earn returns in exchange. The financing supports Firelight’s effort to help fintech companies and investors recover losses more quickly following DeFi exploits while widening participation in its risk-sharing network.