Kelp DAO Bridge Exploited in $292 Million DeFi Hack

Kelp DAO, a major player in the EigenLayer ecosystem, has suffered a significant blow after its LayerZero bridge was exploited. The attack, which occurred on April 18th, resulted in the theft of 116,500 rsETH worth $292 million.

The attacker used the stolen funds to deposit collateral on Aave, Compound, and Euler, borrowing an additional $236 million across DeFi lending markets. This move allowed the attacker to build up significant debt positions, taking advantage of the lack of immediate response from Kelp's emergency multisig pause.

Fortunately, Kelp's emergency pauser multisig finally triggered 46 minutes after the initial drain, freezing the LRT Deposit Pool and preventing further losses of approximately $200 million. However, the secondary attack on Aave, Compound, and Euler was already complete by this time, leaving the lending markets with significant bad debt.