Kelp DAO Disputes LayerZero's Account of $290 Million Incident, Citing Default Settings

A recent $290 million exploit has sparked a heated debate between Kelp DAO and LayerZero, with Kelp set to dispute LayerZero's claim that it ignored warnings about its single-verifier setup. According to a source familiar with the matter, Kelp plans to argue that the compromised verifier was actually 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 around $290 million, from Kelp's LayerZero-powered bridge by poisoning the servers that LayerZero's verifier relied on to check transactions. Kelp claims that the compromised servers were built and run by LayerZero, not by Kelp, and that the setup was based on LayerZero's default configuration, which is used by 40% of protocols on the platform. Security researchers have also questioned LayerZero's account of the incident, with one researcher noting that LayerZero's reference setup ships with single-source verification defaults across every major chain. The incident has led to a protocol-wide migration, with LayerZero announcing that it will no longer sign messages for any application running a single-verifier setup.