Kelp DAO Disputes LayerZero's Account of $290 Million Disaster, Citing Default Settings as Culprit

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, a liquid restaking protocol, is pushing back against LayerZero's post-mortem of the incident, which 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 it was using was LayerZero's default configuration. The incident 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 infrastructure was built and run by LayerZero, not Kelp, and that the configuration it was using was recommended by LayerZero's own quickstart guide and default GitHub configuration. Security researchers have also questioned LayerZero's account of the incident, with one researcher noting that LayerZero's reference setup ships with single-source verification defaults across every major chain. The incident has sparked a wider debate about the security of cross-chain messaging protocols and the need for greater transparency and accountability in the industry.