The recent Kelp DAO rsETH and LayerZero incident has been identified as the most severe DeFi systemic risk event of 2026, according to security firm SlowMist. The breach was not due to coding errors but stemmed from Kelp's reliance on a single-point trust configuration (1/1 DVN) lacking redundancy. Hackers exploited this vulnerability by replacing RPC node data to deceive the verification network, injecting forged messages, and minting rsETH. They then liquidated these assets through lending protocols like Aave. SlowMist warns that DeFi composability risks are escalating with layered integrations, urging the industry to shift from traditional code audits to comprehensive system audits that include cross-chain configurations and trust chains.
Kelp DAO Exploit Highlights Systemic Risks in DeFi
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