Kelp DAO Disputes LayerZero's Claims Over $290 Million Disaster

A recent $290 million disaster has sparked a heated debate between Kelp DAO and LayerZero. According to a source familiar with the matter, Kelp DAO plans to challenge LayerZero's claim that it ignored warnings to change its single-verifier setup. Kelp DAO asserts that the compromised verifier was actually part of LayerZero's own infrastructure and that the setup was LayerZero's default configuration. 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 verify transactions. Kelp DAO claims that 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. The source argues that all of this infrastructure was built and run by LayerZero, not Kelp. Furthermore, Kelp DAO contests LayerZero's framing of the '1/1 configuration' as a fringe choice, stating that LayerZero's own quickstart guide and default GitHub configuration recommend a 1/1 DVN setup. In fact, 40% of protocols on LayerZero are currently using the same configuration. Security researchers have also questioned LayerZero's isolated framing, which pinned the blame on Kelp. Yearn Finance core team developer Artem K reviewed LayerZero's public deployment code and found 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 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 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 make the necessary fixes.