Massive $292 Million Kelp DAO Hack: What It Means for XRP Yield Holders!

by

What The Kelp DAO’s $292 Million Hack Means For <a href="https://bbg-news.com/xrp-usd/">XRP</a> Holders Earning Yield

Last weekend, a significant security breach impacted Kelp DAO, a liquid staking protocol, resulting in a loss of $292 million worth of tokens. An attacker targeted the platform’s LayerZero-powered bridge on Saturday, April 18th. This is currently the largest hack of a decentralized finance (DeFi) platform in 2026, and it has prompted urgent action from several lending services. This incident affects those who earn rewards by staking XRP.

Kelp DAO Hack Linked To Broader Cross-Chain Risks

According to market expert Iso Ledger, the recent hack of Kelp DAO was a significant security failure with broader implications for DeFi. He reported on X that hackers stole $292 million in under an hour. The attacker prepared for the attack by funding a Tornado Cash wallet about 10 hours beforehand, and then exploited a core function called IzRecieve within LayerZero’s EndpointV2 contract.

According to Iso Ledger, a single action allowed the attacker to drain $292 million worth of rsETH (116,500 tokens, representing 18% of the total supply) from the Kelp DAO bridge, sending it directly to their digital wallet. The attacker then reportedly used the stolen rsETH as collateral on Aave V3 to borrow ETH, leaving the DeFi protocol with unrecoverable debt.

I just saw that Aave acted really quickly after the exploit – they immediately froze the rsETH markets on both V3 and V4. It’s pretty rough to see the price of Aave drop 10% because of this, and what makes it even worse is that this one bridge exploit seems to have hit three different protocols at the same time.

After a serious hack, Kelp DAO and Kernel DAO, which operate a system for restaking across multiple blockchains, remained silent for 46 minutes while the attack was happening. This delay caused significant worry about how quickly the system can react to security breaches.

Expert Warns XRP Holders About FXRP And Bridge Dependency

As a researcher, I’ve been following the recent Kelp DAO hack, and it seems particularly relevant for XRP holders. Iso Ledger highlighted that this event should give people pause when considering yield opportunities involving wrapped XRP assets. Specifically, he pointed to FXRP, which is the wrapped XRP on the Flare Network. According to Flare’s developers, FXRP is built using LayerZero’s Omnichain Fungible Token standard (OFT).

FXRP shares the same technical vulnerabilities – specifically in its bridge standard, how it connects to other blockchains, and a function called IzRecieve – that were exploited in the recent $292 million Kelp DAO attack. An analyst is drawing parallels between XRP and Kelp DAO as a warning about the risks of relying on external bridges.

Iso Ledger pointed out that the recent attack highlights the need for XLS-66D, a new lending system designed to work directly with the XRP Ledger. This system would keep XRP transactions on the main network, eliminating the need for external agreements. He explained that the vulnerability exploited in the Kelp DAO incident wouldn’t be possible if the XRP remained within its original network.

Read More

2026-04-20 20:57