Kelp DAO Hit by Massive $292 Million Crypto Heist, Affecting 20 Blockchains

A significant breach occurred in a cross-chain bridge, leading to the theft of 116,500 rsETH, equivalent to roughly 18% of the token's circulating supply. The attacker exploited LayerZero's cross-chain messaging layer, tricking it into releasing the funds to an attacker-controlled address. The breach has triggered a series of emergency measures, including the freezing of core contracts and markets across various DeFi platforms. As a result, holders of rsETH on non-Ethereum deployments are facing uncertainty about the value of their tokens, potentially leading to a feedback loop of panic redemptions and pressure on the unaffected Ethereum supply. The incident has already led to a 10% drop in AAVE and has prompted other platforms, such as Lido Finance and Ethena, to take precautionary measures. The full extent of the damage and potential recovery of the stolen funds remain to be seen, with Kelp DAO investigating the incident with LayerZero, Unichain, and outside security specialists.