LayerZero Pledges 10,000 ETH to Aid Kelp DAO Recovery

LayerZero committed 10,000 ETH to support liquidity following a $292 million exploit of the Kelp DAO bridge on April 18, 2026. The company said it will deposit 5,000 ETH into the DeFi United rescue fund and 5,000 ETH directly into Aave, and pledged additional support for GHO liquidity.

Attackers fed Kelp’s bridge fake data that mimicked a legitimate cross-chain message, causing the system to release 116,500 rsETH in a single transaction before Kelp halted operations 46 minutes later. Rather than sell the tokens on the open market, the attacker deposited roughly 90,000 rsETH into Aave and borrowed about $190 million in ETH and other assets. The borrowings created bad debt and exhausted stablecoin liquidity on Aave, and the protocol’s total value locked fell from about $32 billion to $20.3 billion in the days after the exploit.

Security researchers and patch analysts attributed the operation to TraderTraitor, a subunit of North Korea’s Lazarus Group. That group has been linked to a separate $285 million DeFi theft on April 1, bringing the combined haul from the two incidents to more than $575 million over 18 days.

DeFi United, a coalition formed to support Aave and affected users, has gathered more than $300 million in pledges from protocol teams, companies and individuals. The group published a recovery plan that calls for staged ETH deposits converted into rsETH to be sent into Kelp’s lockbox contract and coordinated liquidation of the attacker’s remaining positions on Aave and Compound to recover additional assets.

Arbitrum froze 30,766 ETH tied to the attacker’s wallets; those funds could be added to the recovery pool pending governance approval. Major contributions and commitments reported for the rescue effort include a 30,000 ETH grant from Consensys and Joe Lubin, a 30,000 ETH low-interest loan from Mantle, a pending 25,000 ETH deployment from Aave DAO, a 5,000 ETH personal pledge from Aave founder Stani Kulechov, and a 2,000 ETH contribution from Kelp DAO, along with smaller pledges from other ecosystem participants.

LayerZero drew criticism for not contributing earlier. Kelp had been operating a 1-of-1 verifier setup that allowed a single LayerZero verifier to validate messages. LayerZero had previously advised that multi-verifier configurations are safer. LayerZero CEO Bryan Pellegrino wrote on X that “no application used only the LayerZero DVN,” a claim that David Schwartz, Ripple’s CTO Emeritus, disputed.

LayerZero said it will no longer accept applications using a 1-of-1 verifier and will require stronger multi-verifier configurations. DeFi United’s staged deposits are intended to restore full backing for rsETH and to unwind the attacker’s borrowing positions through controlled liquidations. Several recovery steps remain subject to governance votes and decisions by infrastructure providers that implemented freezes and other emergency measures.

Industry analysts have tallied more than $605 million in losses across roughly 20 days affecting a dozen or more protocols. Recovery teams say most of the missing funds are expected to be recoverable if planned steps proceed and the necessary governance approvals are granted.