Kelp DAO has migrated its rsETH token from LayerZero to Chainlink’s Cross-Chain Interoperability Protocol (CCIP) following a $292 million exploit that hit a bridge built on LayerZero’s infrastructure. The decentralized autonomous organization cited security concerns with LayerZero’s cross-chain messaging system as the reason for the switch.
The $292 million exploit that triggered the move
On a recent date, attackers drained $292 million from a cross-chain bridge that relied on LayerZero’s technology. Although the exploit targeted a specific project using LayerZero’s framework rather than LayerZero’s core protocol itself, the incident raised alarms across the DeFi space. Kelp DAO said in a statement that the vulnerability exposed “fundamental risks” in LayerZero’s security model. The DAO decided to move its rsETH tokens to Chainlink CCIP, a competing cross-chain solution, to protect user funds.
Why Kelp DAO chose Chainlink CCIP
Chainlink CCIP uses a decentralized oracle network to verify cross-chain messages, which Kelp DAO believes offers stronger security guarantees. Unlike LayerZero’s design, which relies on a single “Ultra Light Node” for message verification, Chainlink CCIP requires multiple independent oracles to reach consensus before executing a transaction. Kelp DAO stated that this multi-signature approach reduces the chance of a single point of failure. The migration began shortly after the exploit was disclosed and has now been completed, according to the DAO’s update.
What the migration means for rsETH holders
For holders of rsETH, the token’s functionality should remain unchanged. Kelp DAO assured users that no action is required on their part. The token’s supply, price, and liquidity are unaffected. However, users who interact with cross-chain applications built on LayerZero may need to switch to new interfaces that use Chainlink CCIP. Kelp DAO said it will provide migration guides and support for those who need help.
The move also underscores a growing trend in DeFi: projects are re-evaluating their cross-chain infrastructure after high-profile hacks. LayerZero has not commented on Kelp DAO’s decision, but the protocol remains in use by dozens of other projects.
Next steps for Kelp DAO and the broader ecosystem
Kelp DAO now plans to integrate Chainlink CCIP with additional DeFi protocols to expand rsETH’s cross-chain utility. The DAO also said it will conduct a security audit of its new bridge setup within the next month. Meanwhile, LayerZero has pledged to improve its security measures following the $292 million exploit, though no specific timeline has been given. For now, rsETH holders can continue using the token as before, with the underlying bridge now running on Chainlink’s network.
