LayerZero’s “Approved” Design Led to $292 M Bridge Hack-Kelp Exposes Shocking Truth

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Kelp claims that LayerZero approved the setup it blamed for $292 million bridge hackWeb3

What to know:

  • Kelp DAO claims LayerZero personnel approved the 1-of-1 verifier setup that LayerZero later blamed for the $292 million rsETH bridge hack.
  • LayerZero’s postmortem contradicted Kelp, but data showed 47% of active LayerZero OApp contracts used a 1-of-1 DVN setup. LayerZero banned it post-hack.
  • The $292 million exploit, linked to a North Korean hacker group, led Kelp to migrate its rsETH off LayerZero’s OFT standard to Chainlink’s Cross-Chain Interoperability Protocol (CCIP).

Kelp DAO says that people at LayerZero initially gave the okay for a specific security setup. LayerZero now points to this approval as the reason a hacker, believed to be connected to North Korea, was able to steal around $292 million from Kelp’s rsETH bridge.

This statement clashes with LayerZero’s analysis from April 19th. That report explained Kelp’s rsETH application depended entirely on LayerZero Labs for verification, a setup that goes against LayerZero’s advice to use multiple verifiers.

According to Kelp’s memo, LayerZero’s team examined its settings for over two and a half years and discussed integrations eight times, but never mentioned that a unique configuration could create a significant security problem.

The memo, called “Setting the Record Straight Around the LayerZero Bridge Hack,” shows screenshots of Telegram conversations proving LayerZero knew about and didn’t raise concerns with Kelp’s system for verifying transactions.

A screenshot reveals a LayerZero team member offering support with default settings, and tagging a colleague who previously discussed a custom message verification setup. Kelp claims these “defaults” were the standard LayerZero Labs configuration that LayerZero later identified as the setup exploited in the attack.

CoinDesk could not independently authenticate the screenshot.

LayerZero’s templates

Kelp highlights LayerZero’s documentation – including its bug bounty program, quickstart guide, and developer examples – as proof that LayerZero presented the choice of verification networks as something developers could customize, even though it initially guided them towards using a single verification network.

LayerZero’s bug bounty program, managed through Immunefi, won’t offer rewards for issues caused by how developers set up their own applications (OApps). This includes problems with verifier networks and executors that stem from those configurations.

The LayerZero OFT Quickstart guide and the example configuration on GitHub both list LayerZero Labs as the only designated Delivery Network (DVN), without providing an option for a secondary DVN.

According to Kelp’s memo, security researcher Sujith Somraaj reported the same attack method to LayerZero on April 19th, but his bug bounty submission was turned down.

Somraaj, a former auditor for LayerZero, reported on X that a potential bug bounty issue exists. He explained that his initial report required all ‘Decentralized Verification Nodes’ (DVNs) to trigger the vulnerability, but the way LayerZero deployed the system removed that requirement. This change allowed hackers to claim a $295 million bounty instead of Somraaj.

Kelp moves to Chainlink

Kelp is switching how its rsETH token works across different blockchains. It’s moving away from using LayerZero’s system and will now use Chainlink’s Cross-Chain Interoperability Protocol instead. This means rsETH will transition from LayerZero’s OFT standard to Chainlink’s Cross-Chain Token standard.

A security breach resulted in the loss of approximately $292 million worth of rsETH (116,500 units) from Kelp’s bridge, which is powered by LayerZero. Before Kelp temporarily halted its operations, the LayerZero Labs DVN processed two fraudulent transactions worth over $100 million, according to the protocol.

LayerZero believes the recent attack was likely carried out by the Lazarus Group, a hacking organization linked to North Korea. The attackers gained access to the list of servers (RPCs) used by LayerZero’s network, took control of two of those servers, and replaced the software running on them.

The attackers followed up with a DDoS attack targeting healthy RPC nodes, which caused the system to switch over to the compromised ones. LayerZero explained that this allowed the network to falsely confirm transactions that never actually happened.

Kelp believes that many projects were set up in a way that created a significant vulnerability. According to data from Dune Analytics reported by CoinGecko, almost half (47%) of the 2,665 active projects built on LayerZero used this risky setup over a three-month period ending around April 22nd. This exposed over $4.5 billion worth of assets to potential risk.

So, LayerZero released their report on the recent hack, and honestly, they’re saying everything worked as it should have. That’s a tough pill to swallow, but they’ve changed their policy. Basically, they won’t be signing messages for any apps that are set up with just one instance anymore. This change went into effect right after the attack, which is at least a positive step.

As a researcher following this situation, I’ve learned that my team actually discovered the exploit and reported it to LayerZero, rather than being alerted by them. This has led to some concerns about how actively LayerZero is monitoring its own systems.

The memo claims that many of the same addresses were given administrative access on both the LayerZero Labs and Nethermind decentralized voting networks (DVNs) – ten on April 8, 2026, and five more on February 6, 2025. CoinDesk hasn’t confirmed this information independently.

LayerZero did not respond to a request for comment by publication.

Based on current documentation, LayerZero Labs’ DVN is the sole attestor currently supported on at least two blockchain networks, Dinari and Skale.

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2026-05-05 23:29