News section

LayerZero, the infrastructure provider that some onlookers say is partially at fault for the $292 million Kelp DAO attack, will contribute 10,000 ETH and other support to the DeFi United initiative.Kelp says it used the default configuration for its LayerZero-powered Decentralized Verifier Network that was exploited.

JPMorgan analysts said DeFi hacks, including the recent Kelp DAO exploit, and stagnant TVL in ETH terms continue to limit institutional interest in DeFi.The analysts said persistent hacks appear to push investors toward Tether’s USDT stablecoin, as users move funds out of DeFi during stress.

Flying Tulip has added a circuit breaker to slow or queue withdrawals during abnormal outflows as April DeFi losses surged.More than $600 million was lost in DeFi exploits in April alone, with two incidents accounting for about 95% of the total.

Attackers drained 116,500 rsETH worth approximately $290 million from KelpDAO’s LayerZero-powered bridge on April 18 in 2026’s largest DeFi exploit to date.LayerZero has attributed the attack with preliminary confidence to North Korea’s Lazarus Group, specifically its TraderTraitor subunit.The fallout triggered over $13 billion in outflows from DeFi platforms including Aave, which froze rsETH markets on both its V3 and V4 deployments.

KelpDAO’s exploiter is moving roughly $300 million in stolen funds through Arbitrum and into Tron-based USDT.The hack could cool Wall Street’s appetite for blockchain and tokenization deals.SlowMist flags new “MacSync Stealer” macOS malware draining crypto wallets, compounding security fears.

Curve’s Michael Egorov says many DeFi hacks stem from avoidable centralized weak points.He cites the KelpDAO rsETH exploit and Aave’s response as a systemic warning.Egorov wants Ethereum and Solana foundations to help lead common security standards.

The Arbitrum Security Council has frozen 30,766 ETH held in an address on Arbitrum One linked to the Kelp DAO exploit.Arbitrum said the frozen funds will only be moved by further action through Arbitrum governance.

Kelp DAO has countered LayerZero’s earlier statement, saying the 1-of-1 DVN setup under criticism was shipped as the default at LayerZero.Aave released a new report evaluating two potential bad debt scenarios resulting from the $292 million exploit on Kelp.

The first scenario is far cheaper but runs the risk of rsETH depegging an estimated 15%, while the second is costlier but better protects Ethereum mainnet and concentrates losses at the layer 2 level.

The DeFi sector posted a 5.6% single-day drawdown — among the most severe moves since 2024.Kelp Dao, Aave and LayerZero are pointing the finger at each other and it is still unclear how losses will be distributed.

Total losses estimated at about $293 million, making it the largest DeFi exploit of 2026.

LayerZero said North Korean hacker group Lazarus is likely responsible for the $292 million Kelp DAO exploit.The April 18 Kelp DAO exploit has triggered a $10 billion outflow from Aave due to concerns over potential bad debt on the protocol.The total value locked across the DeFi sector fell 7% in the past 24 hours to $86 billion.

LayerZero said that Kelp’s DVN setup caused the $290 million exploit, as investors questioned which protocol would step up to cover the shortfall.

LayerZero said Lazarus likely led the Kelp DAO exploit that drained 116,500 rsETH worth $292 million.LayerZero blamed Kelp DAO’s single-DVN setup, saying no backup verifier blocked the forged cross-chain message.The exploit triggered over $10 billion in Aave outflows and a wider DeFi TVL drop.

The contagion from the Kelp exploit could have been contained, but at the cost of capital efficiency, according to the founder of Curve Finance.

Kelp exploit targeted rsETH bridge contract, leading to $293 million loss within a short period.Stolen funds moved through Tornado Cash, with large portion converted into Ether across networks.DeFi platforms froze rsETH activity after contagion risk spread across at least nine connected protocols.