DeFi Protocols Shift Oracles to Chainlink After Kelp DAO Hack
After an April 18 exploit that drained 116,500 rsETH (about $290–293M), Kelp DAO, Solv Protocol and Tydro are moving oracle and bridge services to Chainlink over security concerns.
On April 18 attackers drained 116,500 restaked ETH (rsETH) from Kelp DAO, worth roughly $290–293 million. In the days that followed, Kelp DAO moved its rsETH token to Chainlink. Solv Protocol and Tydro announced they will also migrate oracle and bridge services to Chainlink.
Solv Protocol said it will adopt Chainlink’s Cross-Chain Interoperability Protocol (CCIP) and replace LayerZero bridges after what it described as an extensive security review that found CCIP offered the strongest security assurances. Tydro reported it was switching providers after its former oracle vendor, Chaos Labs, experienced an incident that caused the protocol to pause markets over potential inaccurate price feeds.
LayerZero issued a statement on April 20 attributing the Kelp breach to a single point of failure in Kelp DAO’s implementation. LayerZero said Kelp relied on a single LayerZero DVN as the only verified path despite prior warnings against that configuration.
Chainlink Labs’ strategic initiatives lead, Zach Rynes, described the exploit as a wake-up call for DeFi teams and said multiple groups are replacing older oracle and bridge systems with Chainlink to strengthen baseline security protections. He pointed to Chainlink’s continuous operation through past market shocks when teams assess vendor reliability.
Nik Kunkel, founder of oracle provider Chronicle, warned that concentrating much of the ecosystem on one infrastructure provider carries its own risks. “There are risks anytime a large portion of an ecosystem depends on a single piece of infrastructure,” he cautioned, and added that data infrastructure must remain independently transparent and verifiable.
Marcin Kazmierczak, co-founder of RedStone, said a smaller group of trusted oracles is forming as institutional participation in DeFi grows. RedStone provided emergency support to Tydro after the Chaos Labs incident to help restore price feeds while the protocol evaluated longer-term options.
On-chain analytics show Chainlink secures more than $32 billion and holds about 58% market share among oracle providers. Chronicle holds roughly $7.6 billion and RedStone about $3.7 billion, figures that reflect value concentrated among a few providers.
Several protocols conducting post-exploit reviews said they will reassess cross-chain setups, verification paths and oracle resilience. Some teams have started implementing Chainlink services while completing audits and technical changes aimed at reducing the risk of similar failures.
The material on GNcrypto is intended solely for informational use and must not be regarded as financial advice. We make every effort to keep the content accurate and current, but we cannot warrant its precision, completeness, or reliability. GNcrypto does not take responsibility for any mistakes, omissions, or financial losses resulting from reliance on this information. Any actions you take based on this content are done at your own risk. Always conduct independent research and seek guidance from a qualified specialist. For further details, please review our Terms, Privacy Policy and Disclaimers.
Articles by this author
