Kelp DAO Shifts Blame to LayerZero's Default Settings for $290 Million Disaster

A recent $290 million exploit has led to a heated debate between Kelp DAO and LayerZero, with Kelp set to dispute LayerZero's claim that it ignored warnings about its single-verifier setup. According to a source familiar with the matter, Kelp plans to argue that the compromised verifier was actually part of LayerZero's own infrastructure, and that the setup was based on LayerZero's default configuration. The incident occurred when attackers drained 116,500 rsETH, worth about $290 million, from Kelp's LayerZero-powered bridge by poisoning the servers that LayerZero's verifier relied on to check transactions. Kelp claims that the compromised infrastructure was built and run by LayerZero, not Kelp, and that LayerZero's own quickstart guide and default GitHub configuration point to a 1/1 DVN setup, which is the same configuration used by 40% of protocols on LayerZero. Security researchers have also questioned LayerZero's framing of the incident, with one researcher noting that LayerZero's reference setup ships with single-source verification defaults across every major chain. The incident has led to a wider debate about the security of cross-chain messaging infrastructure and the need for greater transparency and accountability in the industry.