Kelp DAO Counters LayerZero's Claims, Alleging Default Settings Caused $290 Million Disaster

A recent incident has sparked a heated debate in the crypto community, with Kelp DAO and LayerZero at the center. The $290 million exploit has led to a blame game, with each party accusing the other of negligence. According to a source familiar with the matter, Kelp DAO plans to contest LayerZero's claim that it ignored 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 approximately $290 million, from Kelp's LayerZero-powered bridge by poisoning the servers that LayerZero's verifier relied on to verify transactions. Kelp DAO argues that the compromised infrastructure was built and run by LayerZero, not Kelp. 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 setup, which requires only a single validator to sign off on a cross-chain message, is 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 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 that LayerZero itself supported. In response to the incident, 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.