Kelp DAO Disputes LayerZero's Account of $290 Million Exploit, Citing Default Settings as the Cause

A recent cryptocurrency exploit has sparked a heated debate, with Kelp DAO set to challenge LayerZero's post-mortem analysis of the $290 million disaster. According to a source familiar with the matter, Kelp DAO plans to argue that the compromised verifier was actually part of LayerZero's own infrastructure, and that the setup in question was the default configuration provided by LayerZero. The incident occurred when attackers drained 116,500 rsETH, worth approximately $290 million, from Kelp's LayerZero-powered bridge by poisoning the servers that LayerZero's verifier relied on to check transactions. Kelp DAO claims that the attackers compromised two of LayerZero's own servers, which were used to verify the legitimacy of cross-chain transactions, and then flooded the backup servers with junk traffic to force LayerZero's verifier onto the compromised ones. The source contests LayerZero's claim that KelpDAO chose a 1-of-1 DVN setup despite recommendations to configure multi-DVN redundancy, stating that LayerZero's own quickstart guide and default GitHub configuration point to a 1/1 DVN setup. Furthermore, the source notes that 40% of protocols on LayerZero are currently using the same configuration. Security researchers have also questioned LayerZero's account of the incident, with one researcher pointing out 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 cryptocurrency protocols, with some commentators accusing LayerZero of deflecting responsibility for the exploit.