Kelp DAO Disputes LayerZero's Account of $290 Million Exploit, Claims Default Settings Were to Blame

A recent crypto controversy has erupted, with Kelp DAO set to challenge LayerZero's explanation of the $290 million exploit that occurred on Sunday. According to a source familiar with the matter, Kelp plans to contest LayerZero's claim that it was to blame for ignoring warnings about its single-verifier setup. The issue centers around the cross-chain messaging firm's role in the exploit, which saw 116,500 rsETH tokens, worth around $290 million, drained from Kelp's bridge. Kelp claims that the decentralized verifier network (DVN) that was compromised was actually part of LayerZero's own infrastructure, not a third-party verifier. The source also contested LayerZero's framing of the '1/1 configuration' as a fringe choice, arguing that this setup was actually the default configuration provided by LayerZero. In fact, 40% of protocols on LayerZero are currently using this same configuration. The incident has sparked a heated debate, with some security researchers and community members accusing LayerZero of deflecting responsibility and throwing Kelp under the bus for trusting a setup that LayerZero itself supported. As the situation continues to unfold, both parties are working to establish a shared understanding of what happened and to implement fixes to prevent similar incidents in the future.