In April, an attacker drained 116,500 rsETH, roughly $292 million, from Kelp DAO's LayerZero-powered cross-chain bridge. LayerZero attributed the attack to North Korea's Lazarus Group, specifically the sub-group known as TraderTraitor.

Incidents like these highlight a familiar pattern that we're recognizing: each new exploit becomes "evidence" that on-chain lending and collateralized borrowing are inherently fragile, and that the category should slow down. But that evidence is pointing to the wrong conclusion.

Demand for on-chain, self-custodial lending is one of the strongest product signals for Bitcoin. The Kelp DAO exploit merely demonstrates that building on networks other than Bitcoin and Bitcoin-derived codebases like Liquid are the wrong foundation for it.

...read more at blog.blockstream.com