Massive DeFi Hack Rocks Cryptocurrency Community

A significant DeFi hack has shaken the cryptocurrency community, with Kelp DAO's LayerZero-powered bridge being exploited for approximately $292 million on Saturday.

The attack, which occurred at 17:35 UTC, resulted in 116,500 rsETH being drained from the protocol. This represents about 18% of the total circulating supply of rsETH.

Kelp DAO is a liquid restaking protocol that routes user-deposited ETH through EigenLayer to earn extra yield and issues rsETH as a tradeable receipt token. The attacker tricked LayerZero's cross-chain messaging layer into believing a valid instruction had arrived from another network, causing Kelp's bridge to release the funds to an attacker-controlled wallet.

The stolen funds were moved through a Tornado Cash-funded address, with about $250 million of the stolen rsETH already being converted to ETH. The incident has led to several protocols freezing their rsETH markets in response, including Aave, SparkLend, and Fluid.