Kelp DAO Drops LayerZero, Moves to Chainlink After $292M Bridge Hack

Kelp DAO, the DeFi lending protocol tied to last month's $292 million bridge exploit, is replacing LayerZero with Chainlink for its cross-chain infrastructure, CoinDesk reported. A Chainlink representative told The Block that Kelp DAO is "the first major protocol to abandon LayerZero since the LayerZero vulnerability incident." The move follows an April 18 attack attributed to North Korea's Lazarus Group, which exploited LayerZero's single-validator configuration for its Omnichain Fungible Token (OFT) bridge and stole 116,500 rsETH from Kelp DAO. LayerZero has argued that Kelp DAO's 1:1 Decentralized Validator Network (DVN) setup was the issue, saying it warns against single-validator configurations. Kelp DAO and other observers counter that 1:1 is LayerZero's default onboarding recommendation for new users. An analysis cited by Kelp found that 47% of roughly 2,665 LayerZero applications had problems, and when exploits occurred they were running the same single-validator configuration. LayerZero later said it would stop signing for single-verifier configurations. Chainlink's Decentralized Oracle Network (DON) requires at least 16 independent node operators to validate cross-chain transactions. Kelp DAO said its migration to Chainlink CCIP "directly addresses the core architectural flaw exploited in this incident." Alongside adopting Chainlink's Cross-Chain Interoperability Protocol (CCIP), rsETH will shift to the Cross-Chain Token (CCT) standard. Chainlink said its infrastructure has facilitated more than $30 trillion in cross-chain transaction volume. Separately, DeFi United was formed after the attack to restore funding support for rsETH. LayerZero contributed about 10,000 ETH, including a 5,000 ETH donation to Aave and a 5,000 ETH loan. The campaign has raised more than $300 million in crypto so far. Over the weekend, alleged victims of an earlier North Korea-linked hack sued DeFi United, seeking to seize 30,766 ETH that the Arbitrum DAO Security Council froze following the Kelp DAO incident. Arbitrum DAO had previously voted to release the ETH to DeFi United. On Monday, Aave filed an emergency motion to dismiss the lawsuit and lift the temporary freeze on the funds.