Kelp’s Layerzero V2 Bridge Exploit Causes Significant Financial Impact
- An attacker exploited Kelp’s Layerzero V2 bridge, minting 116,500 rsETH without any corresponding burn on April 18, 2026.
- Llamarisk estimates bad debt between $123.7 million and $230.1 million across seven affected markets.
- The Aave DAO treasury holds $181 million as of April 20, including assets in Ethereum-correlated holdings, AAVE tokens, and stablecoins.
- The attack led to adjustments in WETH interest rate models on multiple platforms to manage risk and prevent further issues.
- Two scenarios were modeled by Llamarisk to determine the protocol’s final exposure based on Kelp’s loss allocation decision.
On April 18, an exploit of Kelp’s Layerzero V2 bridge resulted in the unauthorized minting of rsETH, leading to substantial financial implications for affected markets. The Ethereum-based Layer2 solutions faced significant challenges due to this incident.
Llamarisk’s analysis highlights potential bad debts ranging from $123.7 million to $230.1 million depending on how losses are socialized across markets. The Aave DAO treasury remains robust with $181 million in assets as recovery efforts continue.
