Major Crypto Heist: $292 Million Stolen from Kelp DAO, Leaving 20 Blockchains Exposed

A devastating hack has struck Kelp DAO, a liquid restaking protocol, with an attacker making off with a staggering $292 million worth of restaked ether (rsETH) from its LayerZero-powered bridge. The incident, which occurred on Saturday at 17:35 UTC, has sent shockwaves throughout the DeFi ecosystem, with the stolen funds representing around 18% of the token's circulating supply. The attacker exploited a vulnerability in LayerZero's cross-chain messaging layer, tricking the bridge into releasing the rsETH to an attacker-controlled address. The fallout is being felt across over 20 blockchains, including Base, Arbitrum, and Scroll, where wrapped versions of the token are deployed. With the reserve backing these wrapped tokens now drained, holders are facing uncertainty over the value of their assets, leading to a potential feedback loop of panic redemptions and pressure on the unaffected Ethereum supply. In response, several major DeFi platforms, including Aave, SparkLend, and Fluid, have frozen their rsETH markets, while Lido Finance has paused further deposits into its earnETH product. The incident has also led to a significant decline in the value of AAVE, with the token falling by around 10% as the market prices in potential bad debt. As the situation continues to unfold, all eyes are on Kelp DAO and its ability to recover the stolen funds and restore confidence in the DeFi ecosystem.