Who should pay for the "default configuration"? Half a month after the rsETH theft, LayerZero's CEO "voluntarily takes responsibility"

By Yangz, Techub News

In the never-sleeping world of Web3, April 18 was originally just an ordinary day. However, for the liquidity re-staking sector—and even the entire DeFi ecosystem—an “earthquake” big enough to be recorded in history quietly played out on-chain. Within less than an hour, hackers (allegedly the Lazarus Group) used Kelp DAO’s cross-chain bridge to mint 116,500 rsETH out of thin air, worth approximately $292 million. Given that rsETH is widely used as collateral, the hackers did not rush to dump it. Instead, they transferred these “air certificates” that had no real backing into mainstream lending protocols such as Aave, borrowing roughly $236 million worth of ETH and dragging top protocols like Aave directly into the abyss of bad debt.

This is not the first time a cross-chain bridge has been attacked, but this time it tore open a wound that the Web3 industry has carried for years: when a vacuum appears at the handoff between underlying infrastructure (the protocol layer) and the upper building blocks (the application layer), who should pay for the vanished billions in assets?

Over the following half month or so, the crisis has already evolved into a public contest of technology, responsibility, and power. From the initial “passing the buck” to today’s LayerZero CEO proactively “taking responsibility,” this is what marks a staged conclusion to the debate over the boundaries of responsibility.

Deadly “1/1 DVN”

To understand this dispute, you must first break down the hackers’ attack method. Interestingly, this attack was not caused by a complex smart contract vulnerability. The root of the problem lies in a configuration parameter: 1-of-1 DVN.

This so-called DVN—i.e., a decentralized validator network—is the component in the LayerZero V2 architecture responsible for verifying cross-chain messages. A 1-of-1 configuration means that as long as a single validator signs, the cross-chain message is considered valid and executed. Worse still, the “key” is not fully controlled by Kelp itself; it depends on the underlying RPC nodes. The hackers poisoned an RPC node in combination with a DDoS attack, hijacked that single validator node, and fed it false “source chain destruction records.” The validator believed it, signed, and that huge amount of assets simply came into existence out of nowhere.

So, the key question—whose “fault” is ultimately this 1/1 DVN?

Behind the finger-pointing: a collision of two logics

In the initial period after the attack, the direction of public opinion was originally tilted toward LayerZero. Social media was full of mockery aimed at Kelp DAO: as a leading protocol managing hundreds of millions of dollars, it used a “paper-thin door lock” like a 1/1 single validator—almost unforgivable.

However, when on April 21 Kelp released an “official statement,” a dramatic reversal in public opinion took place. Kelp’s core argument was just one sentence: if the official documentation and the default configuration itself are inherently dangerous, then responsibility lies with the party that wrote the documentation and set the default values. This is not a user misconfiguration, but a “guidance flaw” built into the product itself. Although LayerZero CEO Bryan Pellegrino repeatedly emphasized in response to the doubts that this was a choice at the application layer, not a vulnerability at the protocol layer, the center of blame began to shift from Kelp’s “inability to execute” to LayerZero’s “systemic arrogance”—knowing full well that the default configuration carried risk, yet still using it as a standard example for quick onboarding.

In addition, third-party developers’ voices further amplified the controversy. Yearn core developer banteg found through technical review that LayerZero V2’s quick-start guide uses this dangerous single-source validation as the default setting across Ethereum, BNB Chain, Polygon, Arbitrum, and Optimism. The criticism from Zach Rynes, head of the Chainlink community, was even sharper: he accused LayerZero of turning users who follow its official guidance into “scapegoats” to cover up the fragility of its infrastructure when facing top-tier hacker attacks.

So, who is right and who is wrong? The truth is: neither is entirely wrong, and neither is entirely right. The essence of this dispute is actually a clash between two logics. One is “geek ethics”: tools are neutral, and users should take responsibility for their own choices. The other is the “secure defaults principle”: a product’s factory state should be at its highest possible level of security. Users may voluntarily lower the threshold for convenience, but the product should not guide users toward danger.

In traditional software engineering, “secure defaults” have become a consensus. Operating systems default to enabling firewalls, and browsers default to blocking pop-ups. These design choices are not made because users are foolish, but because system designers have a responsibility to anticipate “the worst-case way of using it.” However, in the Web3 world, people follow a different logic: “You are responsible”—you keep your own private keys, you check your own configurations, and you bear the losses yourself.

Bryan’s “Taking Responsibility”: a carefully designed retreat

Under the dual squeeze of public opinion and the capital markets, the ZRO token price became the most honest thermometer of the situation. It slid steadily from a high of $1.98 down to $1.32. On May 5, Bryan Pellegrino—who had previously held a hardline stance—finally chose to bow his head, directly saying, “I was wrong.”

This time, he didn’t keep circling the same “tech neutrality” cul-de-sac. Instead, he said he had fallen into a kind of “cognitive dissonance,” mistakenly assuming users possessed the professional awareness to recognize and avoid the weak 1/1 configuration. He then prescribed a remedy aimed at restoring market confidence: shifting the focus entirely to servicing asset issuers, forcibly strengthening security settings, and working closely with DeFi United to deeply participate in the post-crisis reconstruction of rsETH.

Of course, the brilliance of this statement also lies in the “words left unsaid.”

Bryan neither uttered the word “compensation,” nor admitted that Kelp DAO was entirely without fault. Instead, with a PR-savvy phrase—“we have the opportunity to do better”—he lightly transformed an incident involving $292 million into “regret in the pursuit of excellence.”

It’s clearly a posture calculated with precision. LayerZero does not intend—and most likely will not—pay out of its own pocket for this nearly $300 million black hole. But it must stop the bleeding by taking on this kind of “indirect responsibility.” It understands that as the dominant player in the cross-chain space, if it only provides tools and does not bear some responsibility, its moat will amount to little more than an empty shell. By proactively taking responsibility, LayerZero is effectively finding a respectable step for itself—and for the shaky ZRO token price.

Conclusion

The loss of $292 million is not only a bookkeeping deficit; it is a comprehensive stress test of the trust foundation of DeFi. Thankfully, even though protocols keep passing the blame to one another, the industry has still shown a certain awe-inspiring resilience of “self-healing.”

As the lending protocol hit the hardest, Aave did not sit still. When the U.S. law firm Gerstein Harrow attempted to freeze approximately $71 million worth of ETH recovered by Arbitrum DAO, Aave’s governance team submitted an emergency motion to ask the court to revoke the restriction notice in order to relieve the liquidity deadlock. Meanwhile, led by Aave, multiple protocols spontaneously formed the DeFi United plan, which is making breakthrough progress. Through multi-party capital injections and revenue-sharing mechanisms, more than $300 million has been raised, and it is now steadily absorbing the bad debt on the Aave platform.

The losses from this incident are indeed severe. But if they can earn infrastructure providers a real respect for “security boundaries,” make developers more vigilant about “default configurations,” and enable the industry to coordinate and rescue itself in the face of crises, then this tuition may not have been paid in vain. The moment Bryan Pellegrino stepped forward and said “we have the opportunity to do better,” and the moment DeFi United joined forces to fill the ecological gaps, what they aimed to protect was not only the bad debt generated by rsETH, but also the very last shred of users’ confidence in a decentralized world full of uncertainty.