Kelp DAO Disputes LayerZero's Claim of Responsibility for $290 Million Exploit

A recent $290 million disaster 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 set to dispute LayerZero's claim that it ignored warnings to move away from a single-verifier setup, which was compromised in the exploit. According to a source familiar with the matter, Kelp DAO will argue that the compromised verifier was part of LayerZero's own infrastructure, and that the setup was based on LayerZero's default configuration. The exploit 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 DAO claims that the infrastructure was built and run by LayerZero, not Kelp, and that the configuration was based on LayerZero's quickstart guide and default GitHub configuration. The source also added that 40% of protocols on LayerZero are currently using the same configuration. 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.