Firelight activated coverage for Kraken’s Protected Strategies USD Coin (USDC) vault on Oct. 15, setting a $100,000 payout ceiling for each depositor address in each 30-day period.
Sentora, who curates the vault, added it to the coverage program. Eligibility ends when funds leave the vault; users do not have to register separately. Participation carries no guarantee of payment.
Eligible events include smart contract exploits, oracle failures and attacks on governance systems. Coverage may also extend to bad debt or depegs caused by a mechanism, as well as failed redemptions. Losses from market moves, including asset-price changes or shifts in the vault’s yield, are excluded.
Firelight’s Risk Consortium evaluates incidents under the terms in force for the coverage. Qualifying payouts are settled onchain in USDC. A vault-level ceiling and available coverage capital also limit aggregate payouts. Every 30 days, the program resets its cost, available capacity and covered-event range in light of the vault’s composition and risk profile.
Kraken does not rule on whether incidents qualify or fund claims. Payment is not guaranteed, and the arrangement is not insurance.
The vault’s displayed yield is reported after the coverage charge has been deducted. Firelight’s coverage is backed by staked assets held in a shared reserve that serves several programs; vault deposits are kept outside it. Stakers may face slashing after an incident is confirmed as covered.
