According to an announcement released on Thursday, the cryptocurrency exchange Kraken will decommission its LayerZero-based infrastructure and migrate to Chainlink to secure its Kraken Wrapped Bitcoin (kBTC) product.
With this move, Kraken has become at least the fourth cryptocurrency company or project to abandon its LayerZero cross-chain channel following a major incident. Last month, some observers blamed the Seaweed DAO attack on LayerZero’s perceived lax security standards.
This includes migrations from the following sources: Kelp DAO itself, the Bitcoin DeFi platformSolv Protocol, and aboutChainlink is an on-chain reinsurance protocol. A representative from Chainlink told The Block that the total value locked (TVL) across these protocols amounts to $2.57 billion. The TVL of KBTC is approximately $333 million.DeFiLlama.
Kraken stated that it adopted Chainlink’s Cross-Chain Interoperability Protocol (CCIP) “because it provides enterprise-grade infrastructure with strict security and risk management requirements.”
Notably, CCIP requires 16 independent node operators to verify cross-chain transactions. Kraken states that it also has native rate limiting and holds ISO 27001 and SOC 2 Type 2 certifications.
Kraken stated that Chainlink will support “all future Kraken Wrapped Assets.” The exchange has integrated Chainlink. The LayerZero OFT standard, set to launch in 2025, aims to enable kBTC to be interoperable across more than 150 blockchains. The LayerZero-based USDT0 stablecoin also uses Kraken’s Ink blockchain as its underlying blockchain. First deployment.
Johann Eid, Chief Business Officer at Chainlink, said: "Kraken's unwavering commitment to absolute security aligns perfectly with the principles of the CCIP architecture. By retiring its legacy infrastructure and adopting CCIP, Kraken ensures its assets can migrate seamlessly across networks while maintaining enterprise-grade security, thereby attracting significant capital."
Blaming each other?
Some security experts have attributed the $292 million Kelp DAO bridge exploit to LayerZero. According to an incident report, the attackers may be affiliated with LayerZero. North Korea’s Lazarus Group exploited Kelp’s LayerZero bridge, which was configured in a single-validator setup.
LayerZero initially shifted blame—arguing that it had recommended Kelp adopt stronger verification standards requiring multiple signers to approve bridge transactions—but later acknowledged that it bore some responsibility due to communication breakdowns.
According to analysis of the Kelp DAO exploit event, approximately 47% of applications running LayerZero technology use a single-validator configuration, which enhances security.Kelp's argument This is LayerZero's default setting.
LayerZero has since begun rolling out infrastructure and operational improvements and will no longer support the 1/1 decentralized validator network configuration.
After the attack on Kelp DAO, the cryptocurrency community came together to provide support and raised over $320 million through various channels. DeFi United is an initiative aimed at helping restore rsETH support and compensating affected parties for their losses.
A spokesperson for Chainlink noted that over $3 billion in TVL has flowed into Chainlink in recent weeks, including funds migrated from LayerZero and similar migrations from Tydro, the leading lending protocol on Kraken-backed Ink blockchain.
Last week, Tedro stated that, as a precautionary measure following some anomalous behavior, it would cease using its Chaos Labs oracle.