Firelight Protocol has raised $8 million in a funding round led by Gumi Cryptos Capital to develop an onchain protection layer designed to make decentralized finance less intimidating for mainstream fintechs, the firm told CoinDesk.

Market Context

The announcement comes as roughly $80 billion remains locked across DeFi protocols, yet only a fraction of a percent carries any form of onchain coverage. Over $9 billion in assets have been stolen through DeFi protocol exploits over the years, according to DefiLlama data, creating a significant barrier for fintechs and neobanks looking to integrate yield products into their applications.

Analysis

Firelight's core pitch centers on speed and accessibility. Traditional insurance claims from smart-contract exploits can take months to resolve, a timeline that many fintech firms cannot survive. The protocol plans to settle eligible claims within 10 days by leveraging a consortium of independent risk firms including GFX Labs, Hypernative, Credora, Native and Cyfrin. Under the planned system, covered positions will be represented as NFTs, allowing holders to submit claims directly onchain after an exploit occurs. The consortium targets three to four days for the initial decision and less than 10 days total from claim submission through collateral liquidation and payout.

CEO Anthony DeMartino emphasized that the product is specifically designed for mainstream financial firms rather than crypto-native traders. "This isn't built for degens," he told CoinDesk in an interview. "This is built to bring the next wave of capital in. We want to be that protection layer to allow that adoption."

The protocol currently uses XRP as collateral backing its cover system but plans to expand to bitcoin and Stellar's XLM, targeting liquid assets that do not already generate substantial yield. DeMartino indicated additional assets may become eligible over time, provided they meet liquidity and yield characteristics.

Firelight was incubated by Sentora, a DeFi infrastructure provider currently holding $2.4 billion in assets across its vaults. The firm has been working to bring yield products to fintech applications including payroll and remittance platforms, creating natural distribution for Firelight's protection layer once launched.

Key Numbers

- $8 million raised in funding round led by Gumi Cryptos Capital

- $9 billion stolen in DeFi protocol exploits over the years (DefiLlama data)

- $80 billion currently locked in DeFi protocols

- 10 days targeted timeline for claim settlement from initial submission to payout

- 3-4 days target for initial decision by risk firm consortium

- $2.4 billion in assets held across Sentora's vaults

What to Watch

Firelight plans to launch the protocol and its first cover integrations in September, marking a key test of whether rapid onchain claim settlement can unlock broader fintech adoption of DeFi yield products. The expansion beyond XRP to bitcoin and XLM will also be closely watched as an indicator of how quickly institutional-grade collateral can scale within the protection framework. Additional asset additions may follow if liquidity and yield characteristics align with the protocol's requirements.