RIADeFi
Refusal file · other

Why Ketju rejected LayerZero V2

Memo v1Published by Ketju Research

A registry memo, published verbatim and versioned. Superseded versions are recorded, never edited away. A rejection is a judgment for Ketju's client base and thesis, not a universal safety claim. Not investment, legal, tax, or compliance advice.

The memo

REJECTED AS A DEPENDENCY, ON A REALIZED INFRASTRUCTURE COMPROMISE. LayerZero is not a bridge itself; it is a messaging layer other protocols build bridges and omnichain tokens on, so its $6.7B tracked figure likely aggregates value already counted under downstream integrators like Stargate and USDT0 rather than value LayerZero itself custodies — an entity-resolution question this registry has not yet resolved. Security per integration is configurable: an app picks which Decentralized Verifier Network (DVN) operators must attest to a message, from a single DVN up to a larger set. On 2026-04-18, attackers compromised LayerZero Labs' own operational infrastructure — two internal nodes on separate clusters — to forge attestation data and steal about $292M (116,500 rsETH) from Kelp DAO's OFT bridge, which used a 1-of-1 configuration trusting only LayerZero Labs' own DVN. This was not a smart-contract bug; it was proof that LayerZero Labs' own infrastructure is a real, exploited single point of failure for any integration that does not add independent verification, which is the default posture for a large share of real deployments.

What would reopen the file

  • A specific integration this registry would otherwise approve uses a multi-DVN configuration of at least 2-of-2 with operators sharing no common infrastructure, verified on-chain rather than from documentation
  • LayerZero Labs publishes an independent post-incident security audit of its own DVN and RPC operational infrastructure, not only its smart contracts, with remediation confirmed
  • Twelve consecutive months pass since 2026-04-18 with no second LayerZero Labs infrastructure-level compromise
  • Message Library upgrade authority is fully disclosed and mapped to a named, accountable party

Facts on file

Verdict
Rejected
Exposure
other
Chains examined
Ethereum
Memo version
v1
Reviewed
Next review

← All published refusals