Firelight Protocol raised $8 million in a funding round led by Gumi Cryptos Capital. The round will support the development of an on‑chain protection layer for decentralized finance. Firelight plans to launch its first cover integrations in September.

The system is designed to settle eligible smart‑contract exploit claims within about ten days. Firelight intends to expand the collateral backing its cover product beyond XRP to include bitcoin and Stellar’s XLM. The expansion targets fintechs that offer on‑chain yield services.

The funding also included Maven 11, Metalayer, Joint Effects and Tribe Capital. Firelight was incubated by Sentora, a DeFi infrastructure provider that holds $2.4 billion in assets.

DeFi has recorded more than $9 billion in assets stolen through protocol exploits, DefiLlama data shows. Approximately $80 billion is currently locked in DeFi applications, Firelight said. Only a small fraction of that value is covered by existing on‑chain insurance.

In Firelight’s model, a covered position is represented by an NFT. After an exploit, the holder submits the NFT to a consortium of independent risk firms—including GFX Labs, Hypernative, Credora, Native and Cyfrin—for assessment. The consortium aims to issue a decision within three to four days and complete payout in less than ten days.

CEO Anthony DeMartino said the speed of settlement is intended to lower the barrier for mainstream financial firms adopting on‑chain yield products. He added that the product is aimed at bringing the next wave of capital into DeFi, rather than targeting speculative traders.

The new capital will be used for protocol development, expansion of cover offerings and adding ecosystem partners.