Kelp DAO Disputes LayerZero's Account of $290 Million Exploit, Claims Default Settings Were to Blame

A recent $290 million exploit has sparked a heated debate between Kelp DAO and LayerZero, with each side pointing fingers at the other. Kelp DAO is now pushing back against LayerZero's claims that it ignored repeated warnings to move away from a 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, not a third-party verifier. The exploit 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 setup was in line with 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 some alleging that the company is deflecting responsibility for its own compromised infrastructure. 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.