News linked to both this project and an event.
Aave posted on X, stating that the first phase of the rsETH technical recovery plan has been completed, including the burning of the attacker's rsETH on Arbitrum.In the coming days, funds will be gradually replenished for the LayerZero OFT adapter, and rsETH-related operations will be restored.
following the Kelp security incident, Tether's asset interoperability protocol USDT0 has disclosed details of its protocol security architecture. It stated that the system currently utilizes a proprietary DVN (Decentralized Verification Network) with message veto authority, and requires 3 independent validators, operating on different codebases, to reach a 3/3 consensus before cross-chain messages can be settled. The current verification nodes include the USDT0 proprietary DVN, LayerZero, and Canary, with future plans to expand to 4/4 and 5/5 verification mechanisms.USDT0 also stated that all multi-signature transactions must undergo multiple reviews by internal teams, external security teams, and auditing firms before signatures are submitted. The relevant contracts have been audited by firms such as Guardian and OpenZeppelin, and a $6 million bug bounty program has been launched on Immunefi.
LayerZero’s official tweet: LayerZero Labs has formally apologized for the security incident that occurred over the past three weeks and for insufficient communication. Regarding the incident, an internal RPC of LayerZero Labs was compromised by the North Korean hacking group Lazarus Group, contaminating the data sources for its Decentralized Verifier Nodes (DVNs). Concurrently, external RPC providers also suffered DDoS attacks. This incident affected a single application—0.14% of all applications—and involved assets valued at approximately 0.36% of LayerZero’s total assets. The LayerZero protocol itself remained unaffected; over $9 billion in assets continued to flow across chains normally following the incident. LayerZero Labs acknowledged that it previously permitted its DVNs to operate under a “1/1” single-node configuration to secure high-value transactions—a setup inherently vulnerable to single-point failure. LayerZero Labs accepts managerial oversight responsibility for this decision. Additionally, LayerZero disclosed that, three and a half years ago, one of its multi-signature signers had mistakenly used a multi-sig hardware wallet for personal transactions. That signer has since been removed, and the associated wallet has been rotated. As corrective measures, LayerZero Labs announced: - It has discontinued support for “1/1” DVN configurations; - It is migrating all paths to a default 5/5 multi-signature configuration, with a minimum threshold of 3/3; - It has developed a second DVN client written in Rust to ensure client diversity.
LayerZero Labs posted on platform X, stating that the internal RPC used by LayerZero Labs had been attacked by the Lazarus Group over the past three weeks, compromising the true source of its DVN (Decentralized Verifier Network). Meanwhile, external RPC providers experienced DDoS attacks. The incident affected 0.14% of applications and approximately 0.36% of asset value. LayerZero Labs stated that assets are currently secure, and over $9 billion in funds have been bridged through the protocol since April 19.In response to the security risk, LayerZero Labs has ceased providing services for its DVN in a 1/1 configuration. Default configurations for all pathways will migrate to a multi-DVN model of at least 3/3 or 5/5 signatures. Additionally, regarding an incident from three years ago where a multi-sig holder mistakenly used a hardware wallet for personal transactions, LayerZero Labs has removed that signer and replaced the wallet, while developing a custom OneSig multi-sig system. LayerZero Labs advises developers to lock configurations to avoid reliance on default settings and plans to launch an asset management platform, Console, to enhance security monitoring.
According to The Block, the Arbitrum DAO voted to release 30,765.6 ETH (approximately $70 million), previously frozen, to support the DeFi United initiative—aimed at offsetting Kelp DAO’s $292 million exploit loss last month. The vote passed with 90.96% support (182.2 million votes). The attack was allegedly carried out by the North Korean Lazarus hacking group, which exploited a vulnerability in LayerZero’s OFT cross-chain bridge—a single-validator configuration—which allowed attackers to steal 116,500 rsETH and pledge most of the stolen assets as collateral on Aave, resulting in roughly $190 million in bad debt. DeFi United has secured contributions from multiple parties, including 30,000 ETH from Consensys and Joseph Lubin, a 30,000-ETH loan from Mantle, and 5,000 ETH from LayerZero.
Solv Protocol has announced the migration of over $700 million in tokenized Bitcoin assets to Chainlink's cross-chain protocol CCIP, and will gradually phase out LayerZero's bridging support across multiple chains. The migration involves core assets such as SolvBTC and xSolvBTC. Solv stated that the decision is based on the latest security reviews and recent cross-chain security incidents, and CCIP will become its standard cross-chain infrastructure. This move follows Kelp DAO's migration of approximately $290 million in assets to Chainlink, further strengthening the trend of "cross-chain infrastructure shifting toward security-first migration." (CoinDesk)
Aave has announced the completion of the liquidation of the remaining rsETH position belonging to the Kelp DAO attacker. The related collateral assets will be transferred to the Recovery Guardian multi-signature wallet managed by DeFi United, to be used for restoring rsETH reserves and compensating affected users.This liquidation is part of the recovery plan following the previous $292 million attack incident. Aave had previously passed a governance vote to temporarily adjust the rsETH oracle price in order to create bad debt in the attacker's position and trigger liquidation. The relevant parameters will be restored upon completion of the liquidation. Previously, the attacker exploited the Kelp DAO cross-chain bridge based on LayerZero to forge 116,500 unbacked rsETH and borrowed ETH from protocols such as Aave and Compound. Currently, the recovery funds managed by DeFi United have exceeded $320 million.
Kelp DAO has announced the migration of its restaking token rsETH to Chainlink CCIP, citing enhanced security as the reason for this move. Previously, a cross-chain bridge built by Kelp DAO on LayerZero was attacked on April 18, with hackers stealing approximately 116,500 rsETH, valued at around $292 million, and using the assets as collateral to borrow WETH on Aave v3.Regarding the cause of the vulnerability, LayerZero previously stated that the issue stemmed from Kelp DAO using a single DVN verification path configuration rather than multiple independent verifications. Kelp DAO responded that this configuration was the default setting and that LayerZero had confirmed its security without flagging any related risks. LayerZero CEO Bryan Pellegrino subsequently denied this claim, stating that Kelp DAO had proactively modified the default multi-DVN configuration. Both parties continue to dispute responsibility for the incident. (Cointelegraph)
According to The Block, Kelp DAO will abandon LayerZero and adopt Chainlink’s Cross-Chain Interoperability Protocol (CCIP) as its cross-chain infrastructure, along with Chainlink’s Cross-Chain Token (CCT) standard. Previously, in April, Kelp DAO suffered a cross-chain bridge attack totaling approximately $292 million; the attackers are suspected to be linked to North Korea’s Lazarus Group and exploited the single-validator configuration of the LayerZero-powered OFT cross-chain bridge to steal 116,500 rsETH. Chainlink states that its CCIP requires at least 16 independent node operators to validate cross-chain transactions.
According to monitoring by on-chain analyst Specter, the Wasabi Protocol attacker has deposited all stolen funds into Tornado Cash, moving approximately $5.9 million into Tornado Cash. Additionally, North Korean hacking groups have also used Tornado Cash to launder stolen funds from KelpDAO and LayerZero. Their process involved first cross-chaining the assets to Bitcoin, then routing them through Wasabi Mixer, extracting and cross-chaining back to Ethereum, depositing into Tornado Cash, subsequently withdrawing to new wallets and dispersing across multiple addresses. The new wallets then deployed tokens, used the stolen funds to buy in, removed liquidity from the deployment wallet, cross-chained to Tron (USDT), held for several hours or days, and finally sent to OTC-related wallets.
Circle Ventures, Consensys, and Joseph Lubin have announced their support for the DeFi United initiative, aimed at mitigating losses caused by the Kelp DAO vulnerability. Circle Ventures is supporting the ecosystem by purchasing AAVE tokens. Consensys and Ethereum co-founder Joseph Lubin have confirmed the provision of 30,000 ETH to DeFi United. To date, DeFi United has raised over 132,000 ETH, with a total value exceeding $300 million. These funds will be used to cover bad debts resulting from an attacker minting unbacked rsETH via the LayerZero bridge and borrowing assets on Aave. Previously, Aave proposed a donation of 25,000 ETH, while Lido DAO, Ether.fi, and Kelp have respectively proposed or pledged donations of 2,500 ETH, 5,000 ETH, and 2,000 ETH.
According to on-chain analyst Ai Aunt (@ai_9684xtpa), the address 0xb5E…Fc24e deposited a total of 1.397 million UNI tokens—worth approximately $4.6 million—into three exchanges two hours ago. Notably, the Bybit deposit address has had multiple interactions with the DeFi crypto fund DeFiance Capital, which is an investor in both Aave and LayerZero—two entities closely linked to the recent Kelp DAO hack incident.
According to The Block, JPMorgan analysts noted in their latest report that ongoing DeFi security vulnerabilities and stagnant growth in total value locked (TVL) continue to constrain institutional enthusiasm for the DeFi sector. Recently, Kelp DAO’s cross-chain bridge suffered a major attack, during which the attacker minted $292 million worth of uncollateralized rsETH tokens and borrowed real ETH on Aave, resulting in approximately $230 million in bad debt. This caused DeFi TVL to evaporate by roughly $20 billion within several days. LayerZero and blockchain security researchers have attributed this attack to the North Korean hacker group Lazarus Group; some of the stolen funds have been frozen, while the rest remain in circulation. Analysts also pointed out that DeFi TVL denominated in ETH has remained range-bound for an extended period, raising market concerns about whether DeFi can achieve organic growth sufficient to support institutional adoption. Furthermore, following each security incident, users tend to shift funds into USDT as a safe-haven asset—yet this trend has not yet significantly driven USDT’s market capitalization growth.
According to on-chain analyst Ember (@EmberCN), the rsETH incident on April 18 resulted in a funding shortfall of approximately 68,900 ETH (around $160 million): the hacker collateralized rsETH to borrow 99,600 ETH; after Arbitrum recovered 30,700 ETH, the remaining funds were fully converted by the hacker into BTC. The incident has now entered the remediation phase. Aave is coordinating the establishment of a “DeFi United” relief fund, which has so far received cumulative donations totaling 13,500 ETH (approximately $31.45 million). Donors include Lido Finance (2,500 stETH), ether.fi Foundation (5,000 ETH), Aave founder Stani Kulechov (5,000 ETH), Golem Foundation (1,000 ETH), as well as LayerZero and Ink Foundation (amounts undisclosed).
the Lido team has initiated a proposal, planning to allocate up to 2,500 stETH (approximately $5.8 million) from the DAO to cover the rsETH asset shortfall resulting from the recent attack on Kelp DAO.Lido noted that the LayerZero-based exploit has led to insufficient rsETH reserves, triggering a chain reaction across the DeFi ecosystem, including rising interest rate pressure, tightening lending markets, and certain leveraged strategies facing passive liquidation risks.The proposal emphasizes that these funds will only be used as part of a complete recovery solution, provided that the overall shortfall can be fully addressed.Previously, the approximately $292 million attack on Kelp DAO had already impacted Aave, leading to bad debt issues, and its total value locked (TVL) once declined by nearly $8 billion.
According to on-chain analyst PeckShield (@PeckShieldAlert), the KelpDAO attacker has transferred ETH from Ethereum to Arbitrum via the Across Protocol, swapped it for USDT, and then routed the funds to TRON DAO via LayerZero.
According to an official Dune disclosure, following the KelpDAO hack, Dune conducted a security configuration analysis of LayerZero’s DVN (Decentralized Verification Network) for nearly 90 days of active OApps. The data shows that among approximately 2,665 distinct OApp contracts, 47% adopted the 1-of-1 DVN security threshold—the lowest level—45% adopted 2-of-2, and roughly 5% adopted 3-of-3 or higher configurations; KelpDAO’s rsETH resides at the 1-of-1 tier, the minimum security level.
Michael Egorov (@newmichwill), founder of Curve Finance, posted that recent security incidents in the DeFi space—triggered by centralized failure points—have occurred frequently and severely damaged the industry’s reputation. Citing examples such as Aave users being unable to withdraw funds following the rsETH exploit and the LayerZero cross-chain bridge hack, he emphasized that problems must be prevented *before* they occur—not addressed only after damage is done. He called on the industry to jointly establish DeFi security standards, proposing that the Ethereum Foundation and Solana Foundation take the lead in collaborating with projects across ecosystems, auditing firms, and risk-assessment teams to develop principles and specifications for secure system design—and suggesting that lessons could be drawn from traditional finance’s approaches to safeguarding centralized nodes.
Aave risk service provider LlamaRisk has released an incident report: On April 18, 2026, the attacker exploited a vulnerability in Kelp’s LayerZero V2 Unichain-to-Ethereum rsETH routing (a 1-of-1 DVN configuration flaw), forged inbound packets, and illicitly released 116,500 rsETH from the Ethereum-side adapter. Of these, 89,567 rsETH were deposited as collateral into multiple Aave V3 markets—including Ethereum Core and Arbitrum—enabling the borrowing of approximately 82,650 WETH (valued at ~$191 million) and 821 wstETH. Currently, only 40,373 rsETH remain in the adapter, while the total claimable rsETH on the remote chain stands at 152,577—creating a substantial shortfall. Depending on the loss allocation methodology, Aave faces two potential bad-debt scenarios: - Scenario 1 (global pro-rata allocation): Estimated bad debt of ~$123.7 million, with Ethereum Core bearing the greatest pressure; - Scenario 2 (loss confined to L2s): Estimated bad debt of ~$230.1 million, with Mantle facing a WETH reserve shortfall of up to 71.45% and Arbitrum facing a 26.67% shortfall. Following the incident, Aave Protocol Guardians and Risk Administrators immediately froze rsETH/wrsETH reserves across all 11 affected markets.
Odaily News Kelp DAO officially posted on X regarding the follow-up on the theft incident, stating that the cause was the compromise of two RPC nodes hosted by LayerZero, while the third RPC node suffered a DDoS attack. This was an attack targeting LayerZero's infrastructure; Kelp's own systems were not involved in the construction or operation of this infrastructure.The 1/1 DVN configuration is the scheme documented in LayerZero's documentation and is the default setting for all new OFT deployments. Kelp has been operating on LayerZero's infrastructure since January 2024 and has maintained open communication with the LayerZero team. During Kelp's expansion to Layer2, the DVN configuration was discussed, and the default configuration was explicitly confirmed as appropriate at that time.Kelp's current top priority is to protect user interests and prevent risks from spreading within the DeFi ecosystem. The team is collaborating with various parties in the ecosystem to analyze the impact, seek support, and explore all possible mitigation solutions.