XRP Holders Eye New Yield, But Exits Could Take 60 Days

A new protocol on the Flare network gives holders of XRP linked assets a chance to earn yield by backing protection for decentralized finance users. The system, called Firelight, lets people deposit FXRP into a vault and receive stXRP tokens in return. While this puts idle assets to work, it also comes with strict withdrawal rules and financial risks.

Under the upcoming system, the collateral will back coverage sold to various decentralized finance protocols. Customers pay fees for this protection, and those payments generate income for the holders supplying the collateral. However, this setup means users must accept much less immediate access to their funds. Withdrawal wait times could stretch from thirty to nearly sixty days depending on when a user asks to leave.

Rewards stop as soon as the withdrawal process begins. Furthermore, any pending claims tied to the period when the collateral was active can reduce the final amount returned to the user. Existing depositors should also note that early positions automatically roll over into the new coverage phase without needing a manual migration.

Firelight has already drawn significant interest, showing millions in total value locked ahead of its next phase. For holders deciding whether to participate, the main question is whether the potential income outweighs the risk of locked funds and potential coverage losses.