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

A recent crypto controversy has surfaced, with Kelp DAO set to challenge LayerZero's post-mortem analysis of the $290 million exploit that occurred on Sunday. According to a source familiar with the matter, Kelp DAO plans to dispute LayerZero's claim that it ignored warnings to move away from a single-verifier setup. The popular liquid restaking protocol took user-deposited ether, routed it through a yield-generating system, and issued a receipt token, rsETH, in exchange. However, on Saturday, 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 compromised verifier was actually LayerZero's own infrastructure and that the setup it was faulted for running was LayerZero's onboarding default. The source contested LayerZero's framing of the '1/1 configuration' as a fringe choice made against guidance, stating that LayerZero's own quickstart guide and default GitHub configuration point to a 1/1 DVN setup, which 40% of protocols on LayerZero are currently using. Security researchers have also questioned LayerZero's isolated framing, which pinned the blame on Kelp. Yearn Finance core team developer Artem K posted a technical review of LayerZero's public deployment code, stating that the reference setup ships with single-source verification defaults across every major chain. Chainlink community manager Zach Rynes accused LayerZero of 'deflecting responsibility' for its own compromised infrastructure and throwing Kelp under the bus for trusting a setup LayerZero itself supported. Kelp DAO has confirmed that the 1-of-1 DVN setup at the center of the incident reflects LayerZero's documented default configuration and has operated on LayerZero infrastructure since January 2024, maintaining close communication with the LayerZero team.