Firelight Protocol has completed an $8 million funding round, with Gumi Cryptos Capital leading the investment.

BlockBeats News, September 1st, DeFi protocol Firelight Protocol announced the completion of an $8 million financing round, led by Gumi Cryptos Capital, with participation from Maven 11, Metalayer, Joint Effects, and Tribe Capital.

The project aims to build an on-chain risk protection layer for DeFi, with plans to launch the protocol and the first batch of protection products in September, expanding the coverage from XRP to Bitcoin (BTC) and Stellar (XLM).

Firelight, incubated by DeFi infrastructure provider Sentora, primarily addresses the smart contract vulnerability risks faced by fintech companies entering the on-chain yield market. It has designed a set of on-chain protection mechanisms, where users' protected positions will be represented as NFTs. In the event of a vulnerability attack, an alliance composed of independent risk institutions such as GFX Labs, Hypernative, Credora, Native, and Cyfrin will assess the eligibility for compensation. The goal is to complete the audit in 3 to 4 days and the compensation within 10 days.

Firelight CEO Anthony DeMartino stated that the product is not aimed at crypto-native speculators but seeks to become a "protection layer" driving the next wave of funds into the on-chain space. Currently, DeFi has around $800 billion in total value locked, but less than 1% of it is covered by on-chain risk protection. Firelight believes that fintech companies, digital banks, and payment platforms will be its main potential clients.