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 rsETH, a restaked ether token. This incident has sent shockwaves throughout the DeFi ecosystem, as the stolen funds were held in a bridge that backed wrapped versions of the token on over 20 different blockchains. The attacker exploited LayerZero's cross-chain messaging layer, tricking it into releasing the funds to an attacker-controlled address. In response, Kelp DAO's emergency pauser multisig froze the protocol's core contracts, but not before the attacker made two follow-up attempts to drain an additional $100 million. The ripple effects of this hack are being felt across the DeFi landscape, with Aave, SparkLend, and Fluid freezing their rsETH markets and Lido Finance pausing further deposits into its earnETH product. The incident has also led to a significant decline in AAVE's value, with the token falling by around 10%. As the situation continues to unfold, holders of rsETH on non-Ethereum deployments are left wondering if their tokens are backed by anything, sparking fears of a potential feedback loop of panic redemptions. The list of affected platforms is growing, with Ethena temporarily pausing its LayerZero OFT bridges as a precautionary measure. Kelp DAO has acknowledged the incident and is working with LayerZero, Unichain, and security specialists to investigate the exploit and potentially recover the stolen funds. The success of these efforts will be crucial in determining whether rsETH can maintain its peg over the weekend.