Kelp DAO Disputes LayerZero's Claims Regarding $290 Million Incident

A recent incident involving a $290 million exploit has sparked a heated debate between Kelp DAO and LayerZero. According to a source familiar with the matter, Kelp DAO is set to challenge LayerZero's account of the events, which places the blame on Kelp for ignoring warnings about its single-verifier setup. Kelp plans to argue that the compromised verifier was actually part of LayerZero's own infrastructure, and that the setup in question was the default configuration recommended by LayerZero. 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 claims that the attackers compromised two of LayerZero's own servers, which were then used to flood the backup servers with junk traffic, forcing LayerZero's verifier onto the compromised servers. The source also contested LayerZero's claim that Kelp chose a 1-of-1 DVN setup despite recommendations to configure multi-DVN redundancy, stating that LayerZero's own quickstart guide and default GitHub configuration point to a 1/1 DVN setup. Furthermore, the source noted that 40% of protocols on LayerZero are currently using the same configuration. Security researchers have also expressed skepticism about LayerZero's account, with one researcher pointing out that LayerZero's reference setup ships with single-source verification defaults across every major chain. The incident has sparked a wider debate about the security of cross-chain messaging infrastructure and the need for greater transparency and accountability in the industry.