Key Points
- Kelp DAO experienced a security breach resulting in approximately $290–293 million in losses when attackers gained control of RPC nodes connected to LayerZero’s verification system
- According to LayerZero, Kelp DAO disregarded recommendations to implement multiple verifiers and continued operating with a vulnerable single-verifier architecture
- Preliminary investigation points to involvement by the Lazarus Group, a cybercrime operation linked to North Korea
- The incident created ripple effects across at least nine DeFi platforms, with Aave experiencing a $6 billion reduction in total value locked
- LayerZero has announced the discontinuation of support for any application maintaining a single-verifier configuration
Kelp DAO became the victim of one of 2026’s most significant DeFi security breaches during the weekend, with perpetrators extracting approximately $290–293 million from the liquid restaking platform. LayerZero, the provider of the bridge technology involved in the incident, has attributed the vulnerability to Kelp’s chosen security architecture.
The exploit focused on the mechanism that enables Kelp’s rsETH token to transfer across different blockchain networks. Kelp had implemented a single-verifier model, where only one authority validated cross-chain operations. LayerZero maintains that it had previously cautioned Kelp about this approach and suggested deploying multiple independent verification sources.
The perpetrators gained control of two remote procedure call nodes—infrastructure components that enable applications to interact with blockchain data. These servers were replaced with compromised versions that transmitted fraudulent information to LayerZero’s verification layer while maintaining normal appearances to all other monitoring systems.
Since LayerZero’s verifier cross-referenced additional external nodes, the attackers launched a distributed denial-of-service campaign to disable those backup systems. This maneuver redirected network traffic through the corrupted nodes during a window from 10:20 a.m. to 11:40 a.m. Pacific Time on Saturday.
Following the successful failover, the compromised infrastructure informed the verifier that a legitimate transaction had occurred. Kelp’s bridge mechanism subsequently released 116,500 rsETH to addresses controlled by the attackers. The malicious code then executed a self-deletion sequence, eliminating all evidence from the affected servers.
DeFi-Wide Contagion Effects
The stolen rsETH tokens were deployed as collateral across various lending platforms, enabling the withdrawal of genuine crypto assets. Aave, the premier decentralized lending service, sustained the most severe damage.
Aave found itself holding rsETH positions with limited liquidity while valuable assets such as ETH had already been extracted and moved away. The Aave token declined approximately 15% within 24 hours, while the protocol witnessed roughly $6 billion in user withdrawals as participants moved to secure their funds.
A minimum of nine DeFi platforms experienced fallout, including Fluid, Compound Finance, SparkLend, and Euler. Blockchain security organization Cyvers characterized the situation as a “cross-protocol contagion event” extending beyond a single platform compromise.
LayerZero has established a preliminary connection between this attack and the Lazarus Group from North Korea, specifically its TraderTraitor division. This same organization was associated with the $285 million Drift Protocol breach on April 1, indicating Lazarus has extracted over $575 million from DeFi ecosystems within 18 days using distinct attack vectors.
Industry Response and Future Safeguards
LayerZero reports finding no evidence of similar vulnerabilities affecting applications running multi-verifier architectures. The company has restored its verification service and declared that it will terminate support for any project operating with a single-verifier model.
Curve Finance founder Michael Egorov commented that the episode demonstrates the risks inherent in depending on a solitary entity for transaction validation. He further advised limiting reliance on cross-chain technology to situations where it proves essential.
Ledger CTO Charles Guillemet predicted that 2026 will “most likely be the worst year in terms of hacks.” Cryptocurrency-related theft already totaled $482 million during Q1 2026.
Kelp has remained silent regarding LayerZero’s version of the incident timeline and has offered no public justification for continuing with a single-verifier architecture after receiving direct warnings about the security implications.
