Kelp DAO Disputes LayerZero's Account of $290 Million Exploit, Claims Default Settings Were to Blame

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 claim that it ignored 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 it was using the default settings provided by the cross-chain messaging firm. The exploit occurred when attackers drained 116,500 rsETH, worth approximately $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 setup it was using was the default configuration provided by LayerZero, and that the company had not specifically recommended changing it. In fact, Kelp argues that 40% of protocols on LayerZero are currently using the same configuration. The incident has sparked a wider debate about the security of cross-chain messaging protocols and the need for greater transparency and accountability. Security researchers have also weighed in, with some arguing that LayerZero is trying to deflect responsibility for its own compromised infrastructure. As the situation continues to unfold, both Kelp DAO and LayerZero have released statements, with Kelp confirming that it was using the default configuration and LayerZero announcing plans to 'harden security across every possible vector for applications'.