Kelp DAO shifts rsETH to Chainlink CCIP after $292M hack amid LayerZero dispute

Kelp DAO announced it will migrate its rsETH token to Chainlink's Cross-Chain Interoperability Protocol (CCIP) following a $292 million exploit of its LayerZero-powered bridge in April, which led to the theft of 116,500 rsETH. The stolen tokens were used as collateral on Aave, causing market stress and frozen assets. Kelp DAO disputes LayerZero's claim that the hack was due to a risky 1-of-1 verifier setup, asserting LayerZero approved this configuration and was aware of its use. LayerZero's CEO denies these claims, stating the 1-of-1 setup was not recommended and that rsETH was initially configured with a safer multi-verifier setup. Meanwhile, Aave is seeking court approval to release $71 million in frozen ETH linked to the hack, arguing the funds belong to affected users, not alleged North Korean hackers. This ongoing conflict highlights security challenges in DeFi cross-chain protocols and the legal complexities following major exploits.