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

A recent $290 million disaster has sparked a heated debate between Kelp DAO and LayerZero, with each party shifting the blame to the other. Kelp DAO, a liquid restaking protocol, has come forward to dispute LayerZero's post-mortem analysis of the incident, which essentially blames Kelp for ignoring warnings about its 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, and that the setup in question was the default configuration provided 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 validate transactions. Kelp claims that the attack was made possible by a 'sophisticated state-sponsored attack' that compromised two of LayerZero's own servers, which were then used to flood the backup servers with junk traffic. The source also contested LayerZero's claim that Kelp chose a '1/1 configuration' 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. In fact, the source added that 40% of protocols on LayerZero are currently using the same configuration. Security researchers have also come forward to express their skepticism about LayerZero's claims, with one researcher noting that the reference setup provided by LayerZero 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. As the situation continues to unfold, both Kelp DAO and LayerZero have released statements confirming their commitment to improving security and establishing a shared understanding of what happened.