Kelp DAO Migrates rsETH to Chainlink CCIP Post-$292M Exploit

DeFi protocol Kelp DAO announced plans Tuesday to migrate its rsETH restaking token to Chainlink's Cross-Chain Interoperability Protocol following a $292 million exploit on April 18 that drained 116,500 rsETH tokens from its LayerZero-powered bridge.

Hackers exploited the bridge by compromising two RPC nodes in LayerZero's decentralized verifier network, or DVN, according to details from the incident postmortem. They launched a distributed denial-of-service attack on remaining nodes to route traffic through the tainted ones, enabling forged transactions that minted unbacked rsETH. The attackers used the stolen tokens as collateral on Aave v3 to borrow wrapped Ether and processed two additional forged transactions worth more than $100 million before Kelp paused its contracts.

The breach, one of the largest in DeFi this year, has sparked a public dispute between Kelp and LayerZero over responsibility. LayerZero's April 19 postmortem attributed the vulnerability to Kelp's use of a single-DVN, or 1-of-1, configuration rather than the recommended multi-DVN setup with independent verifiers. The company stated that protocol defaults are multi-DVN or use a "DeadDVN" that rejects...