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

A recent exploit resulting in the loss of $290 million has sparked a heated debate between Kelp DAO and LayerZero. According to a source familiar with the matter, Kelp DAO is set to challenge LayerZero's post-mortem analysis of the incident, which essentially blames Kelp for ignoring warnings about its single-verifier setup. Kelp plans to argue that the compromised verifier was actually part of LayerZero's own infrastructure and that the setup in question was LayerZero's default configuration. The incident occurred when attackers drained 116,500 rsETH, worth approximately $290 million, from Kelp's LayerZero-powered bridge by compromising the servers that LayerZero's verifier relied on to check transactions. Kelp claims that the compromised servers were built and run by LayerZero, not Kelp, and that the setup was in line with LayerZero's recommended configuration. The source also contested LayerZero's claim that Kelp chose a 1-of-1 DVN setup 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. Security researchers have also questioned LayerZero's framing 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 infrastructure and the need for greater transparency and accountability in the industry.