Kelp DAO Disputes LayerZero's Claims Over $290 Million Disaster, Citing Default Settings as the Cause

A recent $290 million disaster has sparked a heated debate between Kelp DAO and LayerZero, with each side pointing fingers at the other. According to a source familiar with the matter, Kelp DAO plans to dispute LayerZero's claims that it ignored repeated warnings to move away from a single-verifier setup. Instead, Kelp DAO claims that the compromised verifier was 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 DAO argues that the setup was not a fringe choice, but rather the default configuration recommended by LayerZero. The company points out that 40% of protocols on LayerZero are currently using the same configuration, and that LayerZero's own quickstart guide and default GitHub configuration point to a 1/1 DVN setup. Security researchers have also come to Kelp DAO's defense, stating that LayerZero's isolated framing of the incident is not accurate. Yearn Finance core team developer Artem K posted a technical review of LayerZero's public deployment code, noting that the reference setup ships with single-source verification defaults across every major chain. 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 that LayerZero itself supported. In response, LayerZero has announced that it will no longer sign messages for any application running a single-verifier setup, forcing a protocol-wide migration. Kelp DAO has confirmed that it will work with LayerZero to establish a shared and accurate account of what happened and to make the necessary fixes.