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

A highly publicized $290 million crypto exploit has sparked a heated debate between Kelp DAO and LayerZero, with each side presenting a different account of the events leading up to the disaster. According to sources familiar with the matter, Kelp DAO is set to challenge LayerZero's post-mortem analysis, which places the blame on Kelp for ignoring warnings about its single-verifier setup. Kelp plans to argue that the compromised verifier was actually part of LayerZero's own infrastructure and that the setup in question was the default configuration provided by LayerZero. The incident occurred when attackers drained 116,500 rsETH, worth approximately $290 million, from Kelp's LayerZero-powered bridge by compromising the servers that LayerZero's verifier relied on to verify transactions. Kelp claims that all of the infrastructure involved was built and run by LayerZero, not Kelp. The source also contested LayerZero's claim that Kelp chose a 1-of-1 DVN setup despite recommendations to configure multi-DVN redundancy, stating that LayerZero's own quickstart guide and default GitHub configuration point to a 1/1 DVN setup, and that 40% of protocols on LayerZero are currently using the same configuration. Security researchers have also questioned LayerZero's account, with one researcher noting that LayerZero's reference setup ships with single-source verification defaults across every major chain, and that the deployment leaves a public endpoint exposed that leaks the list of configured servers to anyone who queries it. The incident has sparked a wider debate about the security of cross-chain messaging protocols and the need for greater transparency and accountability in the industry.