BlockBeats message: On September 1, the DeFi protocol Firelight Protocol announced the completion of a $8 million funding round, led by Gumi Cryptos Capital, with participation from Maven 11, Metalayer, Joint Effects, and Tribe Capital, among others.

This project aims to build an on-chain risk protection layer for DeFi. It plans to launch the protocol and its first batch of coverage products in September, and expand the asset support for the coverage funds from XRP to Bitcoin (BTC) and Stellar (XLM).

Firelight was incubated by DeFi infrastructure provider Sentora and primarily targets the risk of smart contract vulnerabilities faced by fintech companies when entering the on-chain yield market. It has designed an on-chain coverage mechanism in which the covered positions of users are represented in the form of NFTs. After a vulnerability attack occurs, an alliance composed of independent risk institutions such as GFX Labs, Hypernative, Credora, Native, and Cyfrin will assess whether the incident meets the criteria for compensation. The goal is to complete the review within 3 to 4 days and complete compensation within 10 days.

Firelight CEO Anthony DeMartino said that the product is not aimed at crypto-native speculators, but instead seeks to become a “protective layer” to help bring the next wave of capital onto the chain. At present, DeFi has about $80 billion in assets locked, but the proportion that receives on-chain risk protection is still less than 1%. Firelight believes fintech companies, digital banks, and payment platforms will be its main potential customers.