Kelp DAO Suffers $292 Million Exploit: A DeFi Disaster Unfolds

DeFi News KELP DAO BREACH: A cross-chain bridge holding nearly 18% of the circulating supply of restaked ether tokens was drained, triggering a rapid response from Kelp DAO to pause contracts. An attacker exploited the bridge, extracting 116,500 rsETH worth around $292 million, by deceiving LayerZero's cross-chain messaging layer into releasing the tokens to an attacker-controlled address. The incident highlights the vulnerabilities in DeFi's complex infrastructure. Kelp DAO, a liquid restaking protocol, had its emergency pauser multisig freeze core contracts 46 minutes after the attack, thwarting two subsequent attempts to drain another 40,000 rsETH. — Shaurya Malwa Read more. NORTH KOREA'S CRYPTO HEIST STRATEGY: The Kelp DAO exploit suggests North Korea-linked hackers are evolving their tactics, targeting the foundational assumptions of decentralized systems rather than just seeking bugs or stolen credentials. This incident, combined with the recent Drift exploit, indicates a coordinated effort by North Korea to hijack crypto funds, with over $500 million siphoned in just two weeks. The attacks exploit the basic trust mechanisms in DeFi, forcing systems to rely on compromised inputs and approve fraudulent transactions. — Margaux Nijkerk Read more. AAVE EXPOSED TO KELP DAO HACK: The attacker deposited 89,567 rsETH into Aave as collateral and borrowed approximately $190 million in ETH and related assets, leaving Aave vulnerable to impaired collateral. Aave Labs responded swiftly, freezing rsETH markets, setting loan-to-value ratios to zero, and halting new borrowing against the asset. The outcome depends on how Kelp handles the shortfall, with potential bad debt for Aave ranging from $124 million to $230 million. — Margaux Nijkerk Read more. COINBASE WARNS OF QUANTUM COMPUTING RISKS: A report commissioned by Coinbase cautions that while current blockchains are secure, the advent of a fault-tolerant quantum computer could break widely used encryption, emphasizing the need for preparation. The report, authored by prominent cryptographers and academics, stresses that current quantum machines are not powerful enough to crack cryptography but highlights the importance of proactive measures. Ethereum and other ecosystems are already exploring quantum-resistant solutions. — Margaux Nijkerk Read more. Other News Regulatory and Policy Updates Calendar