Kelp DAO Disputes LayerZero's Account of $290 Million Exploit, Citing Default Settings as Culprit

A recent $290 million exploit has sparked a heated debate between Kelp DAO and LayerZero, with Kelp set to contest LayerZero's post-mortem analysis. According to a source familiar with the matter, Kelp plans to argue that the compromised verifier was actually part of LayerZero's own infrastructure, not a third-party verifier as previously suggested. The incident occurred when attackers drained 116,500 rsETH, worth approximately $290 million, from Kelp's LayerZero-powered bridge by poisoning the servers that LayerZero's verifier relied on to validate transactions. Kelp claims that the setup in question, which used a single verifier, was LayerZero's default configuration. The company points to LayerZero's own quickstart guide and default GitHub configuration, which recommend a 1/1 DVN setup - the same configuration used by 40% of protocols on LayerZero. Security researchers have also questioned LayerZero's account of the incident, with some accusing the company of deflecting responsibility. Yearn Finance core team developer Artem K noted that LayerZero's reference setup ships with single-source verification defaults across every major chain, leaving a public endpoint exposed that leaks the list of configured servers to anyone who queries it. Chainlink community manager Zach Rynes alleged that LayerZero was deflecting responsibility for its own compromised infrastructure and throwing Kelp under the bus for trusting a setup that LayerZero itself supported. In response to the incident, LayerZero has announced that it will no longer sign messages for any application running a single-verifier setup, forcing a protocol-wide migration. Kelp DAO has confirmed that the 1-of-1 DVN setup at the center of the incident reflects LayerZero's documented default configuration and has called for a shared and accurate account of what happened to be established. The team behind LayerZero is working to harden security across every possible vector for applications, with co-founder Bryan Pellegrino stating that initial investigations have been largely resolved and that more updates will be published soon.