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

A recent incident involving a $290 million exploit has sparked a heated debate between Kelp DAO and LayerZero, with each party attempting to shift the blame. The exploit 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. Kelp DAO claims that the compromised verifier was part of LayerZero's own infrastructure and that the setup in question was the default configuration provided by LayerZero. According to Kelp, the attackers compromised two of LayerZero's servers, which were then used to flood the backup servers with junk traffic, forcing LayerZero's verifier onto the compromised servers. Kelp DAO disputes LayerZero's claim that it ignored repeated warnings to move away from a single-verifier setup, stating that the configuration used was the default setup provided by LayerZero and that 40% of protocols on LayerZero are currently using the same configuration. Security researchers have also come to Kelp's defense, 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.