With Phase 2 approaching, we're answering some common questions from the community. 👇 1️⃣ Users deposit FXRP (Flare's FAssets representation of XRP) into the Firelight vault, a standard ERC-4626 vault, and receive stXRP as the vault share token. stXRP is a pro-rata claim on the vault's FXRP. Rewards are pushed into the vault in FXRP, so the redemption value of each share steps up. No new tokens are minted and no user action is needed. Holders can deploy stXRP elsewhere in Flare DeFi without changing the underlying exposure. Once cover is written against the vault, that capital backs claims. Exits run through a per-period withdrawal queue: a request made during one period becomes claimable after the following period ends. Queued capital stops earning but stays exposed until claimable. That delay is what makes vault capital usable as cover collateral. 2⃣ Reward attribution is on-chain. Organic yield (premiums paid by cover buyers, converted to FXRP) and incentive top-ups flow into the vault through two separate distribution calls, so anyone can verify the split independently. The Split between Organic and Incentive Yield will be available in the Vault Homepage. 3⃣ Capacity is set per 30-day epoch from the vault's collateral plus the first-loss buffer, scaled by the capital adequacy framework (leverage and CAR bounds). Utilization is cover actually matched against that epoch's capacity. The analytics section covers capacity, active coverage, expected loss coverage, leverage and CAR, and it's being expanded at launch. 4⃣ The first-loss buffer is a stablecoin reserve funded by Firelight, held in a dedicated wallet and drawn before any vault capital. Vault capital is only slashed, pro rata, for whatever a validated payout needs beyond the buffer. The protocol reads the buffer balance on-chain at capacity calculation time, so its size is verifiable in real time by anyone, not on a reporting cadence. 5⃣ Dashboard analytics exist today and will be expanded with the Phase 2 rollout. stXRP is a ERC-4626 share - the Firelight Vault Share, so the FXRP-per-share rate is live on-chain at all times via convertToAssets on the vault contract. Anyone can read it directly today and the dashboard analytics are being expanded for launch. We'll share further details over the coming weeks.

Join our X Space with @lombard_finance today at 3PM CET on Bitcoin liquidity meeting institutional-grade risk management. We’ll explore Firelight expanding BTC in onchain risk: as an asset in covered strategies and collateral for coverage capacity.