XRP holders can now earn fees from Kraken’s DeFi customers, but there is a catch
Summary
Kraken added its Protected Strategies USDC vault to Firelight’s DeFi coverage protocol on Flare. Vault fees fund premiums for FXRP collateral providers, who earn returns as coverage fees compound into the pool; Kraken depositors receive protection at a lower yield. Coverage is limited to specified exploits and protocol failures, with compensation capped at $100,000 per address per period and subject to available capital. Providers risk slashing if claims exceed the first-loss reserve, face 30–60-day withdrawal delays, and may remain exposed during unstaking. Premium revenue and FXRP purchases from the new integration have not been disclosed, so its scale depends on continued customer demand and provider participation.
