Kraken, the crypto exchange behind the Bitcoin-backed kBTC token, is replacing LayerZero with Chainlink CCIP as the exclusive cross-chain infrastructure for kBTC and future Kraken wrapped assets.
Kraken said in an X post on May 14 that it's "deprecating its existing cross-chain provider" and moving to CCIP, short for Cross-Chain Interoperability Protocol.
The move comes just about five months after LayerZero announced Kraken's kBTC integration. It also lands shortly after LayerZero came under pressure over the KelpDAO bridge exploit, a messy security incident involving KelpDAO, a liquid restaking protocol behind rsETH.
On April 18, attackers linked to North Korea's Lazarus Group stole about $292 million, or 116,500 rsETH, from KelpDAO's LayerZero bridge. Blockchain forensic firm Chainalysis said attackers compromised internal RPC nodes and used a single-verifier setup to make a fake cross-chain message look valid.
That incident quickly turned into a public blame fight.
- LayerZero first said in a blog post that the exploit was "isolated entirely to KelpDAO's rsETH configuration." The company said KelpDAO had used a 1-of-1 DVN setup, with LayerZero Labs as the only verifier, even though that setup "directly contradicts" the multi-DVN model LayerZero says it recommends.
- KelpDAO pushed back, noting on X that LayerZero had approved the same setup it later criticized. It also accused LayerZero of "blaming users for an issue that was caused by their own infrastructure failure."
- Then, LayerZero softened its stance, admitting in another blog post that it "made a mistake" by allowing its own verifier network to secure high-value assets in that configuration.
Other projects moved away from LayerZero soon after. KelpDAO said it would migrate rsETH to Chainlink CCIP.
Solv Protocol, a Bitcoin staking and tokenized BTC platform, said it would move about $700 million in tokenized Bitcoin assets from LayerZero to Chainlink after a security review following the exploit.
Re, an on-chain reinsurance protocol with more than $475 million in total value locked, also chose Chainlink CCIP as the exclusive cross-chain system for reUSD, replacing LayerZero.