Major Crypto Heist: $292 Million Stolen from Kelp DAO, Leaving Wrapped Ether Stranded Across 20 Chains

A devastating crypto exploit has shaken the DeFi landscape, with an attacker draining a substantial amount of restaked ether (rsETH) from Kelp DAO's cross-chain bridge, valued at around $292 million. The incident occurred on Saturday at 17:35 UTC, when the attacker tricked LayerZero's messaging layer into releasing 116,500 rsETH to a controlled address, equivalent to roughly 18% of the token's circulating supply. The stolen funds were part of the reserve backing wrapped versions of rsETH on over 20 other blockchains, including Base, Arbitrum, and Scroll. In response to the attack, Kelp DAO's emergency pauser multisig froze the protocol's core contracts, while other platforms such as Aave, SparkLend, and Fluid have also taken measures to mitigate potential losses. The aftermath of the exploit has sparked concerns about the potential for panic redemptions and a subsequent impact on the Ethereum supply, as holders of wrapped rsETH on non-Ethereum deployments face uncertainty about the value of their tokens. The incident has also led to a decline in AAVE's price, with the token falling by around 10% as the market reacts to the potential bad debt. As the situation continues to unfold, Kelp DAO has acknowledged the incident and is working with LayerZero, Unichain, and security specialists to investigate the cause of the exploit and potential recovery of the stolen funds.