LayerZero Admits Mistake in 1/1 DVN Setup Tied to $292M Kelp Hack
LayerZero Labs acknowledged a Lazarus Group attack on internal RPCs and a multisig signer's unauthorized personal trade, impacting 0.36% of assets on the protocol.
The Defiant·
The liquid restaking protocol argues that the 1-of-1 verifier setup at the center of the April 18 exploit was LayerZero's own documented default.
Read full articleLayerZero Labs acknowledged a Lazarus Group attack on internal RPCs and a multisig signer's unauthorized personal trade, impacting 0.36% of assets on the protocol.
Security researchers claim more than $3B was at risk due to LayerZero's insecure default settings and poor operational security.
Arbitrum DAO voted to release the Kelp exploit funds, but a U.S. Court restraining notice has put the approved transfer in legal jeopardy.
Solv Protocol will move its tokenized Bitcoin infrastructure to Chainlink, following Kelp DAO's lead after it blamed LayerZero for a hack.
The emergency motion challenges a New York court order redirecting recovered Kelp DAO exploit funds toward decades-old terrorism judgments against North Korea.
DeFi United has now raised more than 132,000 ETH, worth over $300 million, for the rsETH recovery effort. Consensys and Ethereum co-founder Joseph Lubin committed 30,000 ETH, one of the largest contributions so far. The DeFi recovery effort built around the Kelp DAO fallout has crossed another line, and this one is hard to miss. [...]
A forged LayerZero message drained 116,500 rsETH from Kelp DAO. The attacker's collateral loop on Aave triggered the largest confidence-driven liquidity event in the protocol's history. WETH available liquidity fell from $689M to $1.5M in two hours.
Curve founder Michael Egorov has proposed a market-based mechanism to recover DeFi bad debt by turning distressed positions into an investable product. The idea arrives as the Kelp DAO fallout intensifies debate over recovery math, bailout optics and who should absorb losses when failures spread across protocols. DeFi’s latest crisis has reopened an old argument [...]