DeFi protocol Lombard has announced its participation in the ongoing LayerZero asset migration, moving approximately $4 billion in assets to Chainlink’s cross-chain bridge solution. The move reflects continued capital outflows from the LayerZero ecosystem, while Chainlink’s bridging services are gaining favor among institutional-grade projects.

Cross-chain interoperability protocol LayerZero has formally acknowledged that it made a critical error in its architectural decisions related to a $292 million exploit affecting KelpDAO. The admission marks a significant shift from the team’s initial characterization of the incident as a “developer configuration failure.”

LayerZero stated it “owns the decision” to allow its own verifier to secure high-value assets, rather than employing a more distributed verification mechanism. This design choice created a single point of failure that attackers exploited to drain approximately $292 million in assets.

Impact

The loss makes this one of the largest DeFi security incidents of 2026. KelpDAO is a major Restaking protocol whose security directly impacts trust across the broader EigenLayer ecosystem. The exploit has reignited concerns about the systemic vulnerabilities inherent in cross-chain bridge and interoperability protocols.

This is not LayerZero’s first security incident, raising questions within the community about whether fundamental architectural changes are needed rather than incremental patches.

Aftermath

LayerZero has committed to reevaluating its verifier architecture and strengthening security collaboration with ecosystem partners. The incident has prompted renewed calls for industry-wide security standards for cross-chain protocols.

Source: CoinDesk

Solv Protocol is migrating from LayerZero to Chainlink infrastructure to secure $700 million in tokenized Bitcoin holdings, marking one of the most significant DeFi infrastructure switches recently.

Kelp DAO has announced it is abandoning the LayerZero cross-chain protocol in favor of Chainlink’s cross-chain infrastructure, The Block reports.

This follows a $292 million exploit of a bridge associated with LayerZero. LayerZero previously blamed the breach on Kelp’s configuration setup, but Kelp countered that the configuration had been approved by LayerZero itself. The migration marks a broader reassessment of cross-chain security in the DeFi sector.

Kelp DAO claims that LayerZero approved the specific bridge configuration that was exploited in the $292 million Drift protocol hack. The DPRK-linked attack remains one of the largest crypto security incidents of 2026.