Kelp DAO Disputes LayerZero's Claims Over $290 Million Disaster

A recent crypto controversy is unfolding, with Kelp DAO set to challenge LayerZero's account of the $290 million exploit that occurred on Sunday. According to a source familiar with the matter, Kelp DAO plans to dispute LayerZero's claim that it ignored warnings to move away from a single-verifier setup. The liquid restaking protocol claims that the compromised verifier was actually part of LayerZero's own infrastructure, and that the setup it was faulted for running was LayerZero's default configuration. Kelp DAO takes user-deposited ether, routes it through a yield-generating system, and issues a receipt token. LayerZero provides the cross-chain messaging infrastructure that moves these tokens between blockchains, using decentralized verifier networks to verify transactions. However, on Saturday, attackers drained $290 million worth of tokens from Kelp's LayerZero-powered bridge by poisoning the servers that LayerZero's verifier relied on. Kelp DAO argues that the compromised infrastructure was built and run by LayerZero, not by itself. The source also contested LayerZero's framing of the '1/1 configuration' as a fringe choice made against guidance, pointing out that LayerZero's own quickstart guide and default GitHub configuration recommend this setup. In fact, 40% of protocols on LayerZero are currently using the same configuration. Security researchers have also questioned LayerZero's isolated framing, which pinned the blame on Kelp DAO. Yearn Finance core team developer Artem K noted that LayerZero's reference setup ships with single-source verification defaults across every major chain. Chainlink community manager Zach Rynes accused LayerZero of deflecting responsibility for its own compromised infrastructure and throwing Kelp DAO under the bus for trusting a setup that LayerZero itself supported. 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 establishing a shared and accurate account of what happened to make the right fixes together.