LayerZero Infrastructure Shunned by DeFi Protocols After Security Breach

Recent events have led to a significant shift in the DeFi ecosystem, with major protocols moving away from LayerZero infrastructure. According to reports, approximately $2 billion in value is being transferred to the Chainlink CCIP system. This migration follows a recent security breach that exposed hundreds of millions of dollars in risks for many DeFi protocols.

LayerZero acknowledged communication shortcomings during the crisis and stated that its internal RPC infrastructure was targeted by the Lazarus Group. The team also admitted to a '1/1 DVN' configuration error, which created a critical 'single point of failure.'

The security breach on KelpDAO's rsETH bridge exposed liquidity crises and discussions about 'uncollectible debt.' Major protocols involved in this transition process include KelpDAO ($1.5 billion TVL), Solv Protocol ($600 million TVL), and re ($200 million TVL). However, it was noted that some major assets still continue to use LayerZero's OFT standard.