DeFi Market Shaken by $280M LayerZero Bridge Exploit

A recent exploit in KelpDAO's rsETH token via LayerZero's bridge has sent shockwaves through DeFi markets, affecting the price of Solana and prompting traders to reevaluate their risk assessments.

The breach, which resulted in a loss of $280 million, occurred due to a misconfiguration in the verifier setup of the 1/1 DVN bridge. This allowed a single entity to create over 116,000 fake tokens that were then used as collateral in lending protocols such as Aave, Compound, and Morpho.

As a result of this exploit, Stargate suffered significant outflows, with $400 million withdrawn within just 12 hours. The incident has also led to a decline in Solana's chances of reaching $150 by April 30, with odds dropping to 20% due to concerns over systemic risk.