The liquid restaking protocol said the compromised verifier was LayerZero's own infrastructure, and the setup it was faulted for running was LayerZero's onboarding default.
To mitigate risks like sudden withdrawals, policymakers are debating safeguards such as limiting interest payments and offering issuers access to central bank backstops.
Bitcoin pulled back after Friday’s surge as traders considered a CME futures gap, a DeFi exploit rattled altcoins and macro pressures weighed on sentiment.
Bitcoin traded at $74,335 after Iran reimposed controls on the Strait of Hormuz over the weekend, with the modest 1.6% pullback standing out against a 5.7% jump in Brent and a 1.2% drop in European equity futures.
LayerZero said the attackers compromised two RPC nodes the company's verifier relied on and DDoS'd the rest, with the attack working only because Kelp had ignored multi-verifier recommendations.
Breach tied to compromised AI tool may have exposed credentials used by app frontends, the user-facing layer that connects web3 wallets and trading interfaces to backend services.
2026 is shaping up to be DeFi's "worst year in terms of hacks," Ledger's CTO said, as the Kelp exploit shows how a single point of failure can cascade across systems.