Massive Crypto Heist: $292 Million Stolen from Kelp DAO, Leaving Wrapped Ether Stranded Across 20 Blockchains

A catastrophic breach of a cross-chain bridge has led to the theft of nearly a fifth of the circulating supply of a restaked ether token, with the aftermath spreading rapidly through the DeFi ecosystem. On Saturday, at 17:35 UTC, an attacker exploited Kelp DAO's LayerZero-powered bridge, siphoning off 116,500 rsETH, valued at approximately $292 million, and accounting for around 18% of the token's total circulating supply. This incident has triggered a chain reaction, with several major DeFi platforms, including Aave, SparkLend, and Fluid, taking emergency measures to freeze markets and prevent further losses. The attack has also raised concerns about the potential for a broader contagion, as the stolen funds were used to back wrapped versions of the token deployed across over 20 different blockchains. The perpetrator manipulated LayerZero's cross-chain messaging layer, deceiving it into releasing the rsETH to an attacker-controlled address. In response, Kelp's emergency pauser multisig froze the protocol's core contracts, but not before the attacker made two additional attempts to drain a further 40,000 rsETH, worth around $100 million. The fallout from this incident is still unfolding, with holders of the token on non-Ethereum deployments facing uncertainty about the value of their assets, and the potential for panic redemptions on layer 2 blockchains threatening to pressure the unaffected Ethereum supply. As the situation continues to evolve, several key players in the DeFi space, including Lido Finance and Ethena, have taken precautions to mitigate potential losses, while Kelp DAO works to investigate the incident and recover the stolen funds.