Kraken swaps LayerZero for Chainlink CCIP after Kelp hack

Kraken announced Thursday it will deprecate LayerZero and migrate its wrapped-token cross-chain infrastructure to Chainlink’s Cross-Chain Interoperability Protocol (CCIP). The exchange said CCIP will be used exclusively for Kraken Wrapped Bitcoin (kBTC) and all future wrapped tokens, citing security concerns after the April Kelp DAO exploit. Kraken noted CCIP “offers enterprise-grade infrastructure with strict security and risk management requirements,” listing certifications, a secure-by-default design, 16 independent nodes and native rate limits.

In April, attackers stole about $292 million in liquid restaking tokens from Kelp DAO. Investigations linked the breach to actors suspected of ties to North Korea’s Lazarus Group. LayerZero, which Kelp used for cross-chain messaging, issued an apology on May 9 and acknowledged that internal RPCs were attacked and its “source of truth” was compromised. The protocol pointed to Kelp’s configuration and a single-decentralized-verifier-network setup as factors in the breach and said no other applications were affected. LayerZero also reported that more than $9 billion in bridged assets moved across its network since April 19.

Several projects have moved from LayerZero to CCIP. Kelp DAO is migrating to CCIP and burned 117,132 rsETH as part of recovery efforts. Solv Protocol plans to migrate about $700 million in tokenized Bitcoin to CCIP, and onchain reinsurance protocol Re is moving roughly $475 million in total value locked. Industry trackers show more than $3 billion in TVL has shifted to CCIP since the Kelp exploit. Lido wrote that “Chainlink’s defense-in-depth model acts as the definitive standard for cross-chain interoperability.”

Market reaction has been limited. Chainlink’s native token LINK traded around $10, near its bear-market lows and well below its 2021 peak. LayerZero’s token ZRO has declined more than 30% since the April incident and remains below its 2024 highs.

Kraken did not provide a detailed timeline for the migration but stated CCIP will be the exclusive cross-chain infrastructure for its wrapped assets going forward. Protocol teams that depend on cross-chain messaging will need to update integrations to Chainlink’s system as part of the transition.