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 party attempting to shift the blame. According to a source familiar with the matter, Kelp DAO plans to refute LayerZero's claim that it ignored warnings about its single-verifier setup. Instead, Kelp DAO argues that the compromised verifier was part of LayerZero's own infrastructure and that the setup was based on LayerZero's default configuration. The incident 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 verify transactions. Kelp DAO claims that the attackers compromised two of LayerZero's own servers, which were then used to flood the backup servers with junk traffic, forcing LayerZero's verifier onto the compromised servers. The source also contested LayerZero's framing of the '1/1 configuration' as a fringe choice, stating that LayerZero's own quickstart guide and default GitHub configuration point to a 1/1 DVN setup, which is also used by 40% of protocols on LayerZero. Security researchers have also questioned LayerZero's account, 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 crypto industry.