Massive Crypto Heist: $292 Million Stolen from Kelp DAO, Leaving 20 Blockchains Vulnerable

A devastating breach occurred on Saturday, as an attacker successfully drained a substantial amount of restaked ether from Kelp DAO's LayerZero-powered bridge, sparking a chain reaction of emergency responses throughout the DeFi ecosystem. The stolen funds, totaling 116,500 rsETH, represent roughly 18% of the token's circulating supply and are valued at approximately $292 million. The attack compromised the bridge's reserve, which backed wrapped versions of the token deployed across more than 20 blockchains, leaving holders on non-Ethereum networks questioning the validity of their tokens. As a result, Aave, SparkLend, and Fluid have frozen their rsETH markets, while Lido Finance has paused further deposits into its earnETH product. The incident has sent shockwaves through the DeFi community, with AAVE's price plummeting by around 10% as the market assesses potential bad debt. Kelp DAO has acknowledged the incident and is currently investigating the matter with LayerZero, Unichain, and outside security specialists, but the road to recovery remains uncertain.