LayerZero Pledges 10,000 ETH to 'DeFi United' to Recover from Kelp DAO Hack Damage

On April 28, 2026, LayerZero Labs announced it would donate 10,000 ETH to the 'DeFi United' recovery efforts in response to the Kelp DAO rsETH liquid restaking token hack. This decision is part of its commitment to ecosystem responsibility and is expected to play a key role in restoring the collateral value of rsETH, which was hit by an asset outflow totaling $290 million.

LayerZero's 10,000 ETH donation was a decisive factor in the DeFi United recovery fund securing a total of over 132,000 ETH. This amount exceeds $300 million at current value, a level sufficient to fully cover the losses incurred in the Kelp DAO incident. Through this contribution, the recovery fund has successfully surpassed its original fundraising target.

This incident clearly demonstrated the risks that configuration errors in cross-chain infrastructure can pose, going beyond simple code bugs.

The attack, which occurred on April 18, precisely targeted vulnerabilities in the rsETH liquid restaking token. The attacker manipulated collateral assets to extract liquidity from multiple lending protocols, resulting in a funding gap of approximately $290 million. This incident caused a significant shock across the Ethereum DeFi lending market.

The Link Between LayerZero Infrastructure and Configuration Errors

Technical analysis revealed that Kelp DAO had been using default configurations while operating its LayerZero-based Decentralized Verifier Network (DVN). LayerZero, feeling a sense of responsibility for the vulnerability linked to its infrastructure, stepped forward to restore ecosystem trust through this large-scale donation. This is regarded as an unusual case where an infrastructure provider took moral responsibility even for configuration errors on the user side.

• The Ethereum Foundation sold 10,000 ETH via over-the-counter (OTC) trading to BitMNR at an average price of $2,387 to raise recovery funds.
• Consensys participated as a member of the DeFi United alliance, promising technical and financial support.
• The Solana and Tron ecosystems also joined the recovery efforts as part of cross-chain cooperation.
• The total fund size exceeded 132,000 ETH, surpassing the original $300 million goal.

April 2026 is expected to be recorded as the 'worst month for hacks' in the cryptocurrency industry since February 2025. In the first 24 days of April alone, the total amount of losses from hacks and exploits across the industry exceeded $606 million. This figure significantly surpasses the total loss of $144 million recorded in the entire first quarter, highlighting the severity of security threats.

The secured 132,000 ETH will be fully deployed to restore the 116,500 rsETH deficit at Kelp DAO. DeFi United has established a detailed technical execution plan to normalize the token's collateral value at a 1:1 ratio. Following the news that the recovery target has been met, market anxiety is gradually stabilizing.

This incident suggests that the center of risk in the DeFi industry is shifting from simple smart contract bugs to operational security and configuration management. Despite many affected protocols having completed security audits prior to the incident, they failed to prevent asset outflows due to failures in access control and permission management. This left a lesson that the security configuration of the operating environment is just as important as the integrity of the code itself.

The swift response from the DeFi United alliance sent a positive signal to market participants. The cooperation of major ecosystem members such as Consensys, Solana, and Tron to create a large-scale bailout is cited as an example of the industry's self-cleansing capability. This joint response is expected to serve as an important benchmark for similar crisis situations in the future.

Experts agree that more robust cross-chain standards and strict infrastructure configuration guidelines must be introduced in the future. In particular, for bridge and interoperability protocols, there must be caution regarding how minor configuration mistakes on the user end can lead to massive asset losses. The large-scale hacking incidents of this April will be recorded as painful growing pains for the DeFi ecosystem to reach a higher level of maturity.

Following this situation, DeFi protocols are accelerating the establishment of real-time monitoring and emergency response systems in addition to security audits. The collaboration between LayerZero and DeFi United demonstrated the possibility that a crisis for an individual project can be overcome through the cooperation of the entire ecosystem.