KelpDAO

KelpDAO is supporting the recovery of Orbit Bridge following a previous exploit. The multi-phase recovery plan focuses on three key areas: - **Recapitalizing the bridge lockbox** to restore locked funds - **Restoring oracle functionality** for accurate price feeds - **Clearing deficits** across all affected markets Kelp's contribution aims to accelerate the recovery process and help return the bridge system to normal operations. The recovery follows a draft plan initially outlined in October 2025. [Transaction details](https://etherscan.io/tx/0x25dc2ac15ac6b60093c6b6ed1615dc41d5a3994bf36e820465bad6a283f9b693)

KelpDAO has reaffirmed its commitment to rsETH holders following an incident affecting the token's backing. The team has released a technical implementation plan focused on: - **Restoring full rsETH backing** - **Clearing affected positions** on Aave and Compound - **Resuming normal market operations** across impacted platforms The plan is designed to make rsETH holders whole without spreading losses across the broader community. Implementation requires governance approvals and finalized agreements, with progress updates promised as each milestone is reached. KelpDAO emphasized this approach reflects their internal commitment made before any public statements: ensuring rsETH holders would not be left behind.

Kelp has delivered its pledged 2,000 ETH contribution to the DeFi United recovery initiative, aimed at restoring rsETH backing to its nominal exchange ratio following an April 18 incident. **Recovery Progress:** - Initial shortfall: 163,200 ETH - Kelp recovered: ~43,000 ETH - Arbitrum Security Council secured: 30,700 ETH - Remaining gap: ~89,500 ETH The recovery effort, led by Aave, involves contributions from multiple DeFi protocols including Mantle, EtherFi, Lido, Golem, and others. A technical implementation plan has been published covering the restoration of rsETH backing and clearing affected positions across Aave and Compound markets. Kelp has also submitted a proposal to Arbitrum to release frozen ETH into the recovery fund. The plan aims to restore full backing without socializing losses, pending governance approvals and finalized agreements.

KelpDAO has outlined a comprehensive security roadmap following a bridging pause: **Immediate Actions:** - Monitoring locked supply backing bridged assets - Sunsetting low-TVL spoke chains to reduce attack surface - Phased reactivation prioritizing reliability over speed **Development Pipeline:** - Unified backing dashboard for full mainnet and L2 visibility - Built-in rate limits for rsETH under evaluation - Investigation into more secure cross-chain infrastructure providers The protocol emphasizes a measured approach to resuming operations, with a detailed timeline forthcoming. This follows the temporary pause of USDS OFT bridging during an rsETH review, though USDS remains fully collateralized and verifiable onchain.

**Kelp has completed a security overhaul of its rsETH bridging infrastructure following an April 18 exploit of LayerZero's hosted infrastructure that drained 116,500 rsETH.** **What happened:** - Attackers forged a cross-chain message through LayerZero's infrastructure - The exploit targeted the bridging adapter, not Kelp's core systems - Kelp's onchain and offchain infrastructure remained unaffected **The response:** - Full security hardening completed as of April 29 - Every parameter now explicitly defined end-to-end - All deviations from LayerZero's defaults strengthen security - System no longer relies on inherited assumptions The upgrade establishes a more resilient baseline for rsETH and demonstrates how cross-chain bridging can adapt after infrastructure-level attacks. Kelp continues investigating more secure long-term cross-chain solutions.

**Major architectural change for Ethereum layer-2 networks** The L2 ecosystem has moved from a full mesh topology to a hub-and-spoke model. All direct layer-2 to layer-2 routes have been deprecated. **Key changes:** - Every pathway now routes exclusively through Ethereum mainnet - Number of active pathways significantly reduced - Inter-L2 dependencies eliminated - Attack surface meaningfully reduced This represents a fundamental shift in how L2s communicate, prioritizing security and simplicity over direct interconnection.

**Security Enhancement Across Networks** Block confirmations have been raised from 42 to 64 across all chains, marking a significant shift in bridging security standards. **Key Changes:** - Confirmation requirement increased by ~52% (from 42 to 64 blocks) - Higher cost barrier for potential reorg-based attacks - More conservative settlement assumptions for cross-chain bridges **What This Means:** The change prioritizes security over speed, requiring users to wait for additional block confirmations before transactions are considered final. This makes it economically harder for attackers to attempt blockchain reorganizations that could reverse transactions. The update reflects a broader industry trend toward more cautious bridging practices, particularly important given the history of bridge exploits in the ecosystem.

LayerZero has implemented a significant security upgrade requiring **four independent attestors** to verify every cross-chain message, replacing the previous single-attestor model. **The Four Required Attestors:** - Canary - Horizen - LayerZero Labs - Nethermind Each attestor operates on **independent infrastructure and RPC endpoints**, with all four required in both directions on every pathway. **Security Impact:** An attacker would now need to compromise four distinct security operations across four different jurisdictions to forge a single message—a substantial increase in attack difficulty. This multi-attestor approach introduces redundancy and geographic distribution to cross-chain verification, reducing single points of failure in bridge security.

**Kelp and Mantle are hosting a Twitter Space on March 5 at 1 PM UTC** to discuss the recent growth in Mantle's DeFi ecosystem. The conversation will cover: - Factors driving DeFi expansion on Mantle - Kelp's rsETH integration and its role in the ecosystem - Future developments and plans This follows a previous AMA in September 2024 where Mantle discussed its Layer 2 positioning. [Join the Space](https://x.com/i/spaces/1MJgNgbZQNkGL?s=20)

**KUSD rewards are generated from actual payment and settlement activity**, marking a departure from typical crypto reward mechanisms that rely on token emissions or market speculation. **Key differentiator:** - Rewards stem from real-world transaction settlement - Activity continues regardless of market conditions - Payments process consistently in both bull and bear markets **Why this matters:** The reward structure demonstrates resilience across market cycles since payment settlement occurs daily, independent of crypto market volatility. This creates a more sustainable reward model tied to genuine economic activity rather than speculative trading. The approach suggests a shift toward utility-driven tokenomics in the liquid restaking space.