KelpDAO, a restaking protocol that lets users earn extra yield on Ethereum, is cutting bridge support for rsETH, its own liquid restaking token, on 20 networks after last April's $292 million bridge exploit.
The protocol said in a May 17 post on X that it is "consolidating" supported networks to keep higher security standards for rsETH based on usage and integrations. Holders on affected chains have until June 15 to bridge rsETH back to Ethereum mainnet.
- The affected networks include Optimism, Manta, Mode, Blast, Scroll, X Layer, zkSync, Zircuit, Swellchain, Hemi, Berachain, Sonic, HyperEVM, Unichain, TAC, Avalanche, Plasma Stable, MegaETH, Monad and Movement.
After the deadline, recovery will still be possible, but it won't be free
KelpDAO said post-deadline recovery will cost 100 USDC per address, with the exact process to be announced closer to June 15.
KelpDAO narrows rsETH after exploit
The change comes less than a month after attackers linked to North Korea's Lazarus Group stole about $292 million, or 116,500 rsETH, from KelpDAO's LayerZero bridge on April 18.
Blockchain forensic firm Chainalysis said attackers compromised internal RPC nodes and used a single-verifier setup to make a fake cross-chain message look valid.
That incident turned into a public blame fight.
- LayerZero first said in a blog post that the exploit was "isolated entirely to KelpDAO's rsETH configuration." The company said KelpDAO had used a 1-of-1 DVN setup, with LayerZero Labs as the only verifier, even though that setup "directly contradicts" the multi-DVN model LayerZero says it recommends.
- KelpDAO pushed back, noting on X that LayerZero had approved the same setup it later criticized. It also accused LayerZero of "blaming users for an issue that was caused by their own infrastructure failure."
- Then, LayerZero softened its stance, admitting in another blog post that it "made a mistake" by allowing its own verifier network to secure high-value assets in that configuration.
- The reversal didn't stop the fallout. After LayerZero's initial blame, several customers later moved away from its cross-chain stack, with Kraken, Solv Protocol and Re, among others, announcing switches to Chainlink.