# Vaults

Vaults on Firelight are smart contracts responsible for managing staked tokens (e.g., FXRP) and issuing a liquid staking token (in this example, stXRP). They are built to perform three core functions: token deployment, issuing LSTs, and delegating security.

When a user deposits a token, the vault secures the tokens in a smart contract and manages the entire process from deposits to withdrawals. Vaults facilitate LST issuance by minting an LST proportional to the collateral deployed.

The vault is built on the [ERC-4626 standard](https://ethereum.org/en/developers/docs/standards/tokens/erc-4626/), ensuring seamless compatibility and integration with the broader DeFi ecosystem. It’s created to be fully non-custodial, meaning users always maintain control over their underlying assets.

## Launch Phase:

The first and only vault available is the "Launch Vault".

In this initial phase, the launch vault exclusively accepts FXRP deposits. stXRP is minted in proportion to the amount of FXRP deposited and the prevailing exchange rate. A key advantage for early adopters is that there is zero slashing risk during this introductory period, providing a secure environment for participation.

The primary goal of this phase is to ensure maximum stability, security, and a seamless user experience for early adopters. The Launch Vault's goal is to give early participants access via a single, trusted, and straightforward entry point into the Firelight ecosystem. You can deposit your FXRP with the confidence that the vault has been rigorously tested and is managed by core protocol developers. There are no slashing risks in this phase. 

## Feature Complete Phase

In the feature complete phase, the vault will connect into the economic security framework that will provide cover for users in DeFi. 

All tokens deployed on Firelight will be entitled to their proportion of fees generated from this cover. When needed, claims are submitted to the cover consortium, reviewed, and released upon a transparent, decentralized, and reliable approval process. 

For protocols, Firelight enables them to integrate transparent, on-chain coverage directly to their products. It covers smart-contract/bridge/oracle failures (technical) and economic attacks or insolvency events (economic), with clear triggers and attestations, building credibility and increasing retention. In summary, Firelight represents DeFi's economic security engine.


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