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

A recent crypto exploit has sparked a heated debate between Kelp DAO and LayerZero, with each side blaming the other for the massive $290 million loss. The controversy centers around a liquid restaking protocol and a cross-chain messaging firm. Kelp DAO claims that the compromised verifier was part of LayerZero's own infrastructure and that the setup in question was LayerZero's default configuration. According to a source familiar with the matter, Kelp DAO plans to dispute LayerZero's post-mortem of the incident, which blames Kelp for ignoring warnings about its single-verifier setup. The incident occurred when attackers drained 116,500 rsETH, worth approximately $290 million, from Kelp's LayerZero-powered bridge by compromising LayerZero's servers. Kelp argues that the compromised infrastructure was built and run by LayerZero, not by Kelp itself. The source also contested LayerZero's claim that Kelp chose a 1-of-1 DVN setup despite recommendations to configure multi-DVN redundancy. Instead, Kelp claims that LayerZero's own quickstart guide and default GitHub configuration point to a 1/1 DVN setup, which 40% of protocols on LayerZero currently use. Security researchers have also questioned LayerZero's framing of the incident, with some accusing the company of deflecting responsibility for its own compromised infrastructure. The debate highlights the complexities and risks associated with cross-chain messaging and the need for clear communication and shared responsibility among parties involved.