Kelp 🌉 Bridge

What happened

On April 18, 2026 at 17:35 UTC, an attacker drained 116,500 rsETH — about 18% of the token's circulating supply at the time — from the cross-chain infrastructure behind Kelp's liquid restaking token. Kelp's emergency multisig froze the protocol's contracts 46 minutes later, at 18:21 UTC, blocking two further withdrawal attempts. By then the loss stood at roughly $292–294 million depending on the source, making it the largest single DeFi exploit of 2026 (CoinDesk).

How the attack worked

rsETH circulates across more than 20 networks — including Arbitrum, Base, Linea, Blast, Mantle and Scroll — using LayerZero's Omnichain Fungible Token (OFT) standard. Under this design, moving the token cross-chain doesn't mint new supply out of thin air: a contract on the source chain locks or burns tokens, a Decentralized Verifier Network (DVN) attests that this happened, and a contract on the destination chain releases the equivalent amount only once it sees a validly signed attestation.

The flaw wasn't in that design — it was in how Kelp configured it. On 17 of 18 source-chain routes, Kelp required only a single DVN signature (LayerZero Labs' own) to approve a cross-chain message, against LayerZero's explicit recommendation to run multiple independent verifiers. That 1-of-1 setup sat visible on-chain for 381 days before it was exploited (SigIntZero).

LayerZero says the attacker — preliminarily attributed to North Korea's Lazarus Group / TraderTraitor subunit, the same group linked to the $1.5B Bybit hack in February 2025 — didn't break any cryptography. Instead, they compromised two RPC nodes feeding that DVN, swapping their software for malicious builds, then knocked the remaining healthy nodes offline with a DDoS so the DVN was forced to read from the poisoned ones. Those nodes fed the DVN a forged message claiming a valid token lock had occurred on Unichain, while still returning clean answers to outside monitoring tools that would otherwise have flagged the anomaly (LayerZero). With one signature sufficient, Kelp's bridge accepted the forged message and released 116,500 rsETH on the destination side — no tokens had actually been locked upstream.

What happened next

The failure spread beyond Kelp within hours. Aave froze rsETH markets on V3 and V4; SparkLend and Fluid did the same; Lido paused earnETH deposits over rsETH exposure; Ethena pre-emptively paused its own LayerZero OFT bridges. On Aave specifically, rsETH collateral could no longer be trusted 1:1, leaving roughly $196 million in unbacked WETH liabilities on its Ethereum deployment; the WETH pool hit 100% utilization, blocking withdrawals, and Aave's TVL fell by an estimated $6 billion within 24 hours — pushing the protocol to propose socializing losses through Umbrella staking slashes, WETH supplier haircuts and a DAO treasury backstop (SigIntZero).

No funds have been recovered. Roughly $266 million sat unmoved across two attacker-controlled wallets as of the last public update, with no reported bounty offer or negotiation. LayerZero deprecated the compromised RPC nodes and announced its DVN will now refuse to sign for any application running a 1-of-1 configuration (LayerZero).

What this means

• A cross-chain bridge is only as trustworthy as its weakest verifier set — a 1-of-1 DVN reduces a nominally decentralized messaging layer to a single point of failure, regardless of how solid the underlying protocol or wrapped-token contract code is.
• This wasn't a smart-contract bug: no amount of Solidity auditing would have caught it, because the compromise happened one layer below the contracts, in RPC and verifier infrastructure.
• DVN configuration is public on-chain data. For any OFT-based token, checking whether a route relies on a single verifier is a concrete, checkable due-diligence step before treating a wrapped asset as fungible with the native one.
• Liquid restaking tokens widely used as lending collateral concentrate bridge risk into money markets: a $292M bridge failure at one protocol forced billion-dollar loss-socialization decisions at an unrelated lender.