the issue with the @KelpDAO 280m$ hack was that it was just secured by just 1/1 validator set (DVN) on @LayerZero_Core . Which means one faulty transaction from a validator is all that's needed.
my belief is that the root cause was possibly that the LZ validator on Unichain was compromised.
the contagion effects are going to be quite bad. I don't think many people have realized it yet.
- kelp was looping on aave with stETH for a few percentage here and there. Aave is going through a bank run so that means they'll need to unwind their positions
- multiple protocols and chains are now going to be bad debt because their rsETH will get depegged.
- aave's bad debt is more than what they can cover rn so almost anyone who has deposited into their safety net (60mn$) is 100% rekt. all for just staking for a few % in extra yeild.
- trust on LZ & Aave will deteriorate. this is bad for the industry.
- the kelp team (amazing founders) will go through debt
i'd say i feel sorry for everyone who is going to go through the next few hours but unfortunately this is the industry we live in.