Kelp DAO Disputes LayerZero's Account of $290 Million Exploit, Claims Default Settings Were to Blame

A recent cryptocurrency exploit has sparked a heated debate between Kelp DAO and LayerZero, with Kelp set to challenge LayerZero's claims that it was responsible for the $290 million disaster. According to a source familiar with the matter, Kelp plans to argue that the compromised verifier was actually part of LayerZero's own infrastructure, and that the setup in question was the default configuration recommended by LayerZero. The incident occurred when attackers drained 116,500 rsETH, worth approximately $290 million, from Kelp's LayerZero-powered bridge by poisoning the servers that LayerZero's verifier relied on to check transactions. Kelp claims that the infrastructure in question was built and run by LayerZero, not Kelp, and that LayerZero's own quickstart guide and default GitHub configuration point to a 1/1 DVN setup, which is the same configuration used by 40% of protocols on LayerZero. Security researchers have also come out in support of Kelp, with one researcher noting that LayerZero's reference setup ships with single-source verification defaults across every major chain, and that the deployment leaves a public endpoint exposed that leaks the list of configured servers to anyone who queries it. The incident has sparked a wider debate about the security of cryptocurrency protocols and the need for greater transparency and accountability in the industry.