Kelp DAO Disputes LayerZero's Account of $290 Million Exploit, Citing Default Settings as Culprit

A recent $290 million exploit has sparked a dispute between Kelp DAO and LayerZero, with Kelp set to challenge LayerZero's post-mortem analysis of the incident. According to a source familiar with the matter, Kelp plans to argue that the compromised verifier was part of LayerZero's own infrastructure, and that the setup was based on LayerZero's default configuration. 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 verify transactions. Kelp claims that the infrastructure was built and run by LayerZero, and that the setup was not a fringe choice made against guidance, but rather LayerZero's own default configuration. The source also contested LayerZero's framing of the '1/1 configuration' as a choice made by KelpDAO, stating that LayerZero's own quickstart guide and default GitHub configuration point to a 1/1 DVN setup, which is used by 40% of protocols on LayerZero. Security researchers have also questioned LayerZero's account of the incident, with one researcher noting that LayerZero's reference setup ships with single-source verification defaults across every major chain. The incident has sparked a wider debate about the security of cross-chain messaging infrastructure and the need for greater transparency and accountability in the industry.