Kelp DAO Shifts Blame to LayerZero for $290 Million Exploit, Citing Default Settings

A recent cryptocurrency exploit has sparked a heated debate between Kelp DAO and LayerZero, with Kelp set to dispute LayerZero's claims that it ignored warnings about its single-verifier setup. The issue arose when attackers drained $290 million from Kelp's LayerZero-powered bridge by compromising the servers that LayerZero's verifier relied on. Kelp plans to argue that the compromised verifier was part of LayerZero's own infrastructure and that the setup was based on LayerZero's default onboarding configuration. According to a source familiar with the matter, Kelp will claim that the attack was a 'sophisticated state-sponsored attack' that compromised two of LayerZero's own servers, which were then used to flood backup servers with junk traffic. The source also contested LayerZero's framing of the '1/1 configuration' as a fringe choice made against guidance, stating that LayerZero's own quickstart guide and default GitHub configuration point to a 1/1 DVN setup. This configuration is currently used by 40% of protocols on LayerZero. Security researchers have also questioned LayerZero's isolated framing, which pinned the blame on Kelp. Yearn Finance core team developer Artem K noted that LayerZero's reference setup ships with single-source verification defaults across every major chain, and that the deployment leaves a public endpoint exposed that leaks the list of configured servers to anyone who queries it. Chainlink community manager Zach Rynes accused LayerZero of 'deflecting responsibility' for its own compromised infrastructure and throwing Kelp under the bus for trusting a setup LayerZero itself supported. In response to the incident, LayerZero has said 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 in order to make the necessary fixes.