Kelp DAO Disputes LayerZero's Claims Regarding $290 Million Disaster

A recent $290 million disaster has sparked a heated debate between Kelp DAO and LayerZero. Kelp, a liquid restaking protocol, claims that the compromised verifier was part of LayerZero's own infrastructure and that the setup was based on LayerZero's default configuration. According to a source familiar with the matter, Kelp plans to dispute LayerZero's claim that it ignored repeated warnings to move away from a single-verifier setup. The exploit occurred when attackers drained 116,500 rsETH, worth about $290 million, from Kelp's LayerZero-powered bridge by poisoning the servers that LayerZero's verifier relied on to check transactions. Kelp argues that the compromised DVN was LayerZero's own infrastructure, not a third-party verifier, and that the configuration used was based on LayerZero's default settings. Security researchers have also questioned LayerZero's framing of the incident, with some accusing the company of deflecting responsibility. The incident has led to a protocol-wide migration, with LayerZero announcing that it will no longer sign messages for any application running a single-verifier setup.