Firelight, an onchain cover-enablement protocol for DeFi, has announced its integration with Kraken Protected Strategies USDC on Kraken DeFi Earn, bringing built-in protection to one of the largest onchain earn programmes in the industry. According to reports from Firelight, this integration represents the protocol's first major exchange integration and comes as Kraken Earn passes $800 million in deposits, with USDC accounting for close to half of the capital in curated DeFi vaults across the market. The integration is designed to address the risks of onchain yield strategies that involve multiple interconnected protocols, introducing risks that extend beyond any individual platform or vault.
The vault is enabled with cover against defined failures, including smart contract exploits, oracle failures and redemption failures, with terms registered onchain before cover is effectuated. As reported by Firelight, the cover enablement runs through Veda's infrastructure and is curated by Sentora across established DeFi venues such as Tydro. Rather than leaving the vault exposed to every protocol it touches, Firelight enables cover of the vault itself, with validated payouts released directly to it. The capital supporting Firelight's cover sits outside the protocols it protects, so a failure in one of them doesn't hit the money meant to pay out.
Onchain records show $30.5 million of cover is now live on the Kraken USDC vault, with depositors facing a $100,000 cap per address per coverage period. According to Firelight, payouts are handled by Sentora rather than guaranteed by Kraken, ensuring independent validation of claims. This structure allows the protocol to maintain its core principle that cover with clear terms and independent review can sit underneath a product without changing how it operates. The vault cover fundamentals rest on three core principles: every mature financial system has a way to absorb failure, onchain yield has reached a point where protection needs to be built into the product, and audits reduce risk but don't make users whole when something breaks.
Firelight cover enablement is now live on Kraken Protected Strategies USDC (formerly Boosted USDC) on Kraken DeFi Earn. As reported by Firelight, the integration brings programmatic onchain cover to a Kraken USDC vault, setting a template for how platforms can handle onchain risk. The cover enablement runs through Veda's infrastructure, meaning other exchanges, fintechs and vault operators building on Veda can switch on protection for their own products. Firelight is an onchain cover protocol that establishes a protection layer for the infrastructure behind digital asset products, with platforms enabling cover on transparent, verifiable terms registered onchain.
According to Connor Sullivan, Chief Strategy Officer at Firelight, the integration brings cover with clear terms and independent review to one of the industry's largest platforms. Marcel Ohngemach, Product Lead, DeFi at Kraken, noted that since the launch of Kraken vaults in January, depositors have allocated more than $800 million. Since going live on October 6, Firelight has shown that cover with clear terms and independent review can sit underneath a product without changing how it operates. Firelight's contracts are audited by OpenZeppelin, Coinspect, and 0xMacro, with a competitive audit hosted on Immunefi. The protocol was incubated by Sentora and receives technical support services from Sentinel Labs, which just raised an $8 million seed round led by Gumi Cryptos Capital.
