Massive Crypto Heist: $292 Million Stolen from Kelp DAO, Leaving Wrapped Ether Stranded Across 20 Blockchains

A recent exploit has left the DeFi community reeling, as a staggering $292 million worth of rsETH was drained from Kelp DAO's LayerZero-powered bridge, sparking a chain reaction of emergency freezes and pauses across various platforms. The attack, which occurred on Saturday at 17:35 UTC, saw 116,500 rsETH siphoned off, representing roughly 18% of the token's circulating supply. The breach has raised concerns about the validity of wrapped ether tokens deployed across over 20 blockchains, including Base, Arbitrum, and Scroll, with many holders now facing uncertainty about the value of their assets. The fallout has been swift, with Aave, SparkLend, and Fluid freezing their rsETH markets, while Lido Finance has paused further deposits into its earnETH product. The incident has also led to a significant decline in the value of AAVE, with the token plummeting by around 10% as the market reacts to the potential bad debt. As the situation continues to unfold, Kelp DAO has acknowledged the incident and is working with LayerZero, Unichain, and security specialists to investigate the exploit and potentially recover the stolen funds. The attack is the latest in a string of high-profile DeFi exploits, including the recent breach of Solana-based perpetuals protocol Drift, which lost approximately $285 million to North Korea-affiliated actors.