A major security breach in the cryptocurrency sector has resulted in losses of nearly $300 million, after hackers exploited a cross-chain bridge—an essential component of decentralized finance (DeFi) infrastructure—triggering widespread disruption across multiple platforms.
The attack targeted a bridge built using LayerZero technology, which enables communication between different blockchain networks. Through this vulnerability, the attacker managed to siphon approximately 116,500 rsETH tokens, a form of “restaked” Ether issued by Kelp DAO. The total estimated loss stands at around $293 million, making it the largest DeFi-related exploit recorded so far in 2026.
Kelp DAO acknowledged the incident, stating, “We identified suspicious cross-chain activity involving rsETH,” and confirmed that contracts had been paused across multiple networks while investigations are underway.
The impact of the breach extended beyond a single platform due to the interconnected nature of DeFi systems, where assets are often reused across lending, trading, and liquidity protocols. Security firm Cyvers noted, “This was not just a protocol exploit, it immediately became a cross-protocol contagion event,” estimating that at least nine platforms were affected.
To contain potential damage, major DeFi platforms such as Aave temporarily halted activities related to the affected asset, restricting deposits and borrowing. The incident also caused notable market reactions, including a sharp decline in associated token values during trading hours.
Experts highlighted that the event underscores systemic risks within DeFi ecosystems, where tightly integrated protocols can amplify the impact of a single failure. Cyvers CEO Deddy Lavid emphasized, “The challenge is no longer just preventing exploits at the contract level, but understanding how fast they can cascade across integrated protocols.”
