2026's Largest Crypto Heist: Kelp DAO Loses $292 Million to Hackers

A devastating hack has struck Kelp DAO, a liquid restaking protocol, with an attacker making off with a substantial portion of the circulating supply of restaked ether tokens, sparking widespread disruption in the DeFi ecosystem. The breach occurred on Saturday at 17:35 UTC, with the attacker exploiting a vulnerability in LayerZero's cross-chain messaging layer to drain 116,500 rsETH from Kelp's bridge, equivalent to roughly 18% of the token's total supply. This significant loss has triggered a chain reaction, with multiple DeFi platforms, including Aave, SparkLend, and Fluid, freezing their rsETH markets in response to the incident. The attack has also led to a decline in the value of AAVE, with the token plummeting by around 10% as investors factor in potential bad debt. As the situation continues to unfold, the affected platforms are working to mitigate the damage, with some, like Lido Finance, pausing further deposits into their rsETH-exposed products. The incident serves as a stark reminder of the risks inherent in the DeFi space, particularly in the wake of recent high-profile hacks, including the Solana-based Drift protocol, which lost approximately $285 million to hackers in April.