Kelp DAO Disputes LayerZero's Account of $290 Million Exploit

A recent cryptocurrency exploit has sparked a heated debate between Kelp DAO and LayerZero, with Kelp set to challenge LayerZero's post-mortem of the $290 million disaster. According to a source familiar with the matter, Kelp plans to argue that the compromised verifier was actually LayerZero's own infrastructure, and that the setup it was faulted for running was LayerZero's default configuration. The incident occurred when attackers drained 116,500 rsETH, worth about $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 attack was a sophisticated state-sponsored attack that compromised two of LayerZero's own servers, and that the 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, pointing out 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, with some accusing LayerZero of deflecting responsibility for its own compromised infrastructure. The incident has sparked a wider debate about the security of cryptocurrency protocols and the need for greater transparency and accountability. As the situation continues to unfold, both Kelp DAO and LayerZero have released statements, with Kelp confirming that the 1-of-1 DVN setup at the center of the incident reflects LayerZero's documented default configuration, and LayerZero working to 'harden security across every possible vector for applications.'