The Resolv exploit exposed a deeper flaw in DeFi: risk doesn’t stop at the point of failure—it propagates through the entire system. As collateral breaks, oracles lag, and bad debt accumulates, the absence of continuous risk pricing becomes impossible to ignore. This piece explores why DeFi needs to move beyond static audits and start underwriting risk at its source.

Institutions are quietly using DeFi behind familiar fintech interfaces (“DeFi Mullet”), but traditional insurance can’t handle its fast, complex risks. A new, embedded, real-time protection model is needed—this is the gap Firelight aims to fill.

Early DeFi cover failed due to flawed design—using correlated capital, targeting retail users, and relying on outdated risk models. A new approach uses institutional capital, better risk frameworks, and AI-driven analysis to make scalable DeFi coverage possible.

XRP is shifting from a passive asset to a yield-generating one, driven by regulatory clarity and new infrastructure like Flare, enabling it to participate in DeFi for the first time.