Kelp DAO $290 Million DeFi Hack Blamed on Single-Verifier Setup and Lazarus Group

TLDR

• Kelp DAO was exploited for around $290–293 million after attackers compromised RPC nodes used by LayerZero’s verifier
• LayerZero says Kelp ignored warnings to use multiple verifiers and ran a risky single-verifier configuration
• North Korea’s Lazarus Group has been preliminarily linked to the attack
• At least nine DeFi protocols including Aave were affected, with Aave seeing a $6 billion drop in assets
• LayerZero will no longer support any project running a single-verifier setup going forward

Kelp DAO was hit by one of the largest DeFi exploits of 2026 over the weekend, with attackers draining around $290–293 million from the liquid restaking protocol. LayerZero, whose bridge infrastructure was used in the attack, has placed responsibility on Kelp’s own security setup.

The attack targeted the way Kelp’s rsETH token moves between blockchains. Kelp was using a single-verifier configuration, meaning just one entity had to approve cross-chain transactions. LayerZero says it had warned Kelp against this setup and recommended using multiple independent verifiers.

Attackers compromised two remote procedure call nodes, which are servers that help software read and write data on a blockchain. These nodes were swapped with malicious versions that fed false information to LayerZero’s verifier while appearing normal to every other system.

Because LayerZero’s verifier also checked uncompromised external nodes, the attackers ran a distributed denial-of-service attack to knock those offline. This forced traffic to reroute through the poisoned nodes between 10:20 a.m. and 11:40 a.m. Pacific Time on Saturday.

Once the failover triggered, the compromised nodes told the verifier a valid transaction had taken place. Kelp’s bridge then released 116,500 rsETH to the attackers. The malicious software then self-destructed, wiping all traces from the servers.

How the Attack Spread Across DeFi

The attacker used the minted rsETH tokens as collateral on lending platforms to borrow real assets. Aave, the largest decentralized lending protocol, was hit hardest.

Aave was left holding rsETH that could not easily be sold while liquid assets like ETH had already been borrowed and removed. Aave’s token dropped around 15% in 24 hours, and the protocol saw roughly $6 billion in assets withdrawn as users rushed to exit.

At least nine DeFi protocols were affected, including Fluid, Compound Finance, SparkLend, and Euler. Blockchain security firm Cyvers described it as a “cross-protocol contagion event” rather than an isolated exploit.

LayerZero has linked the attack with preliminary confidence to North Korea’s Lazarus Group and its TraderTraitor subunit. The same group was linked to the $285 million Drift Protocol exploit on April 1, meaning Lazarus has drained more than $575 million from DeFi in 18 days through two separate attack methods.

What Changes Now

LayerZero says it has found no contagion to other applications running multi-verifier setups. It has brought its verifier back online and announced it will no longer sign messages for any project using a single-verifier configuration.

Curve Finance founder Michael Egorov said the incident shows the danger of trusting a single party to verify transactions. He also warned against using cross-chain infrastructure unless absolutely necessary.

Kelp has not publicly responded to LayerZero’s account of events or explained why it maintained a single-verifier setup despite explicit warnings.

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