Kelp DAO Disputes LayerZero's Claims Over $290 Million Exploit

A recent $290 million disaster has sparked a heated debate between Kelp DAO and LayerZero, with Kelp set to challenge LayerZero's claims that it was responsible for the massive exploit. According to a source familiar with the matter, Kelp plans to argue that the compromised verifier was part of LayerZero's own infrastructure and that the setup was based on LayerZero's default configuration. Kelp, a liquid restaking protocol, takes user-deposited ether and issues a receipt token, rsETH, in exchange. The token is then moved between blockchains using LayerZero's cross-chain messaging infrastructure, which relies on decentralized verifier networks (DVNs) to verify the validity of cross-chain transfers. On Saturday, 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 claims that the DVN that was compromised was LayerZero's own infrastructure, not a third-party verifier, and that the setup was based on LayerZero's default configuration. The source contested LayerZero's framing of the '1/1 configuration' as a fringe choice made against guidance, arguing 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 isolated framing, which pinned the blame on Kelp, with some accusing LayerZero of 'deflecting responsibility' for its own compromised infrastructure. Yearn Finance core team developer Artem K posted a technical review of LayerZero's public deployment code, which showed that the reference setup ships with single-source verification defaults across every major chain. Chainlink community manager Zach Rynes alleged that LayerZero was 'deflecting responsibility' for its own compromised infrastructure and accused the company of throwing Kelp under the bus for trusting a setup LayerZero itself supported. In response, LayerZero has said it will no longer sign messages for any application running a single-verifier setup, forcing a protocol-wide migration. Kelp DAO has confirmed that the 1-of-1 DVN setup at the center of the incident reflects LayerZero's documented default configuration and has called for a shared and accurate account of what happened to be established in order to make the necessary fixes.