XAO DAO to Deploy 80% of Its XRP Treasury to Firelight

A Major Treasury Decision for XAO DAO

XAO DAO co-founder Santiago Velez recently announced a key milestone for the decentralized autonomous organization: Proposal 66 has officially passed.

This vote authorizes XAO DAO to deploy 80% of its XRPXRP-1.83% treasury into Firelight, a decentralized finance (DeFi) protocol focused on decentralized insurance and yield generation.

The goal behind this move is straightforward. By deploying a substantial portion of its treasury, the DAO aims to put its XRP holdings to work to generate returns for its members. At the same time, this capital helps fund protection services for the broader DeFi ecosystem.

How Firelight and Flare Smart Accounts Work Together

In his announcement, Velez highlighted the pioneering nature of this step. To his knowledge, this is the first time a DAO has allocated treasury funds into a multichain DeFi strategy that combines decentralized insurance directly with yield generation.

Velez expressed gratitude to co-manager Fabio Marzella, Flare Networks co-founder Hugo Philion, and the Flare team for creating the underlying Flare Smart Accounts technology. He also thanked Firelight for making this collaboration possible.

This setup connects XRP with Firelight through Flare Smart Accounts, opening a dedicated path for XRP holders to interact with DeFi protocols.

In an October 6 post, Flare explained that Firelight enables users to place XRP behind a protective layer for DeFi using a single XRP Ledger (XRPL) signature.

Firelight posted on the same day with details for interested participants. Users who want to deploy XRP can connect a supported XRPL wallet, mint FXRP, and deposit it into the Firelight vault. Firelight expressed enthusiasm for the launch, adding: “So bullish on this.”

Current XRP Market Trends and Overview

As XAO DAO executes this strategy, it is worth looking at where XRP stands in the market today.

At the time of writing, XRP was trading at $1.34. The asset remained essentially flat over a 24-hour window, but dropped nearly 4% over seven days and over 11% across a one-month timeframe.

Taking a longer-term perspective, XRP is down more than 44% compared to its price one year ago. It is also roughly 63% below its all-time high of $3.65, which was set in July 2025.

Please keep in mind that yield strategies in DeFi carry inherent risks, including smart contract exposures and token price fluctuations. Past performance of digital assets is no guarantee of future returns.

Upgrading XAO DAO's Community Governance

This treasury deployment comes alongside a wider effort by XAO DAO to enhance community participation in governance decisions.

In an October 22 community update, the organization confirmed that several proposals had successfully passed in recent weeks. XAO DAO also launched a new dedicated community forum to foster open dialogue.

Co-manager Fabio Marzella detailed key upgrades made to the organization's governance app to improve user experience and operational transparency:

• Improved proposal management tools
• Dedicated discussion tools for active proposals
• Donation tracking for both XRP and RLUSD
• Multi-language support for global members
• Searchable historical governance records

Addressing Ecosystem Challenges and Long-Term Growth

These updates build on foundational changes first discussed earlier in the year. In August, reports revealed that XAO DAO was preparing governance enhancements, including wallet delegation, updated quorum rules, and community mini-grants.

Wallet delegation lets members transfer their voting weight to other trusted participants, ensuring their vote counts even if they cannot participate directly. Meanwhile, updated quorum rules aim to clear obstacles caused by inactive wallets that previously stalled key proposals.

The core objective driving these decisions is finding sustainable ways to transform member involvement and capital into ongoing activity across the XRP Ledger ecosystem.

Sustaining retail activity on XRPL remains a challenge for developers. For example, on August 12, XRPL infrastructure team Gen3 announced that it was shutting down its retail products, Aigent.run and AxiomProtocol, citing low demand and rising operational costs.

Moves like XAO DAO's Firelight deployment demonstrate how decentralized organizations are testing new methods to activate idle assets and support long-term ecosystem vitality.