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

A recent cryptocurrency exploit has sparked a heated debate between Kelp DAO and LayerZero, with Kelp set to challenge LayerZero's post-mortem analysis of the $290 million disaster. 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 approximately $290 million, from Kelp's LayerZero-powered bridge by compromising the servers that LayerZero's verifier relied on to check transactions. Kelp claims that the attackers compromised two of LayerZero's own servers and then flooded the backup servers with junk traffic to force LayerZero's verifier onto the compromised ones. The source contends that all of the infrastructure was built and run by LayerZero, not Kelp. Furthermore, Kelp disputes LayerZero's claim that it ignored repeated warnings to move away from a single-verifier setup, stating that LayerZero's own quickstart guide and default GitHub configuration point to 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 framing of the incident, with one expert noting that LayerZero's reference setup ships with single-source verification defaults across every major chain. The incident has led to a wider discussion about the security risks associated with cryptocurrency and the need for greater transparency and accountability in the industry.