What Is Kelp DAO? rsETH Restaking and the 2026 Exploit Explained

Kelp was founded by Amitej G. and Dheeraj B., who earlier co-founded the liquid staking platform Stader Labs ². DefiLlama has tracked Kelp since December 2023 ³.

Kelp now operates under KernelDAO, which also runs Kernel (restaking on BNB Chain) and Gain (automated vaults) ³¹⁰. The KERNEL token has a fixed 1 billion supply. It is used for governance and as a slashing backstop ¹⁰.

The site's footer reads "© 2026 KERNELDAO." The legal operator is not named on the pages checked ¹.

1. Deposit. On Ethereum you deposit ETH or a supported liquid staking token such as ETHx, stETH or sfrxETH ¹⁹. Kelp's original docs say it charges no fee on LST deposits ².
2. Restake. Kelp's contracts pass the assets to node operators that restake them through EigenLayer ².
3. Hold rsETH. You receive rsETH. Rewards are reflected in a rising rsETH-to-ETH exchange rate, not in extra tokens. Points programs such as Kelp Miles and EigenLayer points are tracked separately ⁹.
4. Exit. You can sell rsETH on a DEX, accepting the market price, or redeem through Kelp. Redeeming burns rsETH and releases your chosen asset (ETH, ETHx or stETH) after a contract-level cooldown ²⁹.

Kelp says rsETH is used across many DeFi platforms, including as collateral on lending markets such as Aave ¹⁵. That reach became the central problem in April 2026. Background: what is restaking and liquid staking.

What was taken. On April 18, 2026, an attacker took 117,132 rsETH, worth about $292 million, through the LayerZero setup that moved rsETH between chains ⁵. DefiLlama classifies it as a cross-chain message spoofing attack on Ethereum and Arbitrum, valued at $293 million ⁴. Investigators suspect North Korea's Lazarus Group ⁵.

Why it was possible. LayerZero said Kelp had used a single verifier ("1-of-1 DVN") to approve cross-chain messages, against LayerZero's advice. Kelp said that setting was the default for LayerZero apps. LayerZero later acknowledged it had allowed 1-of-1 configurations for high-value transfers ⁵. With a single verifier, one compromised or spoofed approval is enough to release tokens.

The knock-on effect on Aave. The attacker posted much of the stolen rsETH as collateral on Aave and borrowed wrapped ETH, leaving roughly $190 million in bad debt ⁵⁶. Aave's total value locked fell from $26.4 billion to below $14 billion in the following weeks ⁶.

• Funding. Aave led a restitution effort, "DeFi United," that raised over $300 million in ETH from several protocols ⁵. The Arbitrum Security Council froze about $72 million in ETH. Court orders sought by creditors holding judgments against North Korea complicated its release, and Aave cannot move those funds without court approval ⁵.
• Burn and refill. The exploiter's rsETH was burned on Arbitrum ⁷. Kelp and Aave then refilled the missing rsETH from an Aave Recovery Guardian multisig and a Kelp Recovery Safe ⁵. The first 25,000 rsETH tranche moved on May 13 and withdrawals reopened the next day ⁶. The final 20,373.7 rsETH tranche was announced May 25. Kelp said minting, redemptions and rewards were "running normally" ⁶.
• Security changes.
  • Cross-chain messages now need four independent attestors.
  • Block confirmations rose from 42 to 64.
  • L2-to-L2 routes were removed.
  • Kelp began moving bridging from LayerZero to Chainlink CCIP ⁵.
• Bridge shutdown. In June 2026 Kelp reportedly ended its rsETH cross-chain bridge across 20 networks ⁸. Holders of rsETH on other chains can recover it until June 15, 2027: burn the rsETH on the source chain, pay a fixed 100 USDC fee on Ethereum, and email the transaction records to Kelp's official address. Claims settle quarterly as rsETH reissued on Ethereum ⁸.

Only use contact addresses published on Kelp's official channels. A recovery process that runs by email is an obvious target for impersonators.

• Bridge and cross-chain risk. The 2026 loss came from cross-chain verification, not from EigenLayer or Ethereum staking ⁴⁵.
• Smart-contract and operator risk. Restaked ETH depends on Kelp's contracts, its node operators and EigenLayer, and slashing can reduce the underlying ².
• Liquidity and price risk. Selling rsETH on a DEX may land below its redemption value. Redemptions wait for a cooldown and were paused for weeks during the 2026 recovery ⁶⁷⁹.
• Contagion. Using rsETH as loan collateral links it to lending markets, as Aave's bad debt showed ⁵.

Kelp advertises a bug bounty of up to $250,000 and multiple audits ¹. Audits do not insure deposits. For a scored view of peers, see the liquid restaking ratings and Renzo vs Kelp.