GLOBAL, May 11, 2026 – Multiple protocols in the decentralized finance (DeFi) sector are moving billions of dollars in assets. These projects are shifting their cross-chain operations away from LayerZero. They are moving to Chainlink's Cross-Chain Interoperability Protocol (CCIP). This capital shift began after a security breach in April that affected a protocol known as KelpDAO.
The total amount of money lost in the exploit is not agreed upon by all sources. One report lists the amount at $292 million. A second report states the figure is $293 million. A third source claims the losses were more than $300 million. This difference in reporting shows the varied estimates of the damage caused by the incident.
After the exploit took place, a public dispute started over the technical failure. LayerZero made a statement about the cause of the breach. They said it happened because of a specific configuration issue on the side of KelpDAO. KelpDAO did not agree with this statement and publicly challenged the narrative. KelpDAO said their setup was aligned with the official documentation given by LayerZero. They also pointed out that they had maintained regular communication with the team at LayerZero while using the system. KelpDAO said the real vulnerability was in compromised off-chain systems that are part of the infrastructure at LayerZero.
In response to the incident, several protocols are changing to Chainlink CCIP. They are making this choice to lower the risks that come with single-verifier configurations. Many projects believe that moving to Chainlink CCIP will help them reach higher security standards.
The projects moving their infrastructure have a combined total value locked (TVL) of more than $3 billion. The list of projects making the move includes KelpDAO, Solv Protocol, Re, and Tydro. These projects are officially decommissioning their legacy systems as they switch to the new infrastructure.
Solv Protocol is a major part of this migration. They confirmed they are moving more than $700 million in tokenized Bitcoin. Solv Protocol said they are moving these assets because of the need for better security after the April incident.
As these protocols moved their assets, there was a change in the market for Chainlink. The price of the native LINK token rose by 15 percent. This increase happened during the broad adoption phase of the new protocol. At the same time, the number of LINK tokens held in exchange reserves went down by 13.5 million tokens. Reports noted a tightening in LINK's available supply on exchanges.
The shift to Chainlink CCIP represents a major change for the DeFi protocols involved. They are prioritizing security after the technical failures reported earlier in the year. The migration of more than $3 billion shows how these projects are responding to the dispute between KelpDAO and LayerZero. While LayerZero blamed the user configuration, the protocols involved are choosing to use a different cross-chain system.
Sources
- CryptoSlate – https://cryptoslate.com/chainlink-emerges-as-the-unlikely-3b-winner-of-kelpdao-exploit-as-defi-projects-dump-layerzero/ (Published/Updated: May 11, 2026)
- CryptoPotato – https://cryptopotato.com/after-disputing-layerzero-claims-kelpdao-prepares-chainlink-ccip-migration/ (Published/Updated: May 6, 2026)
- Bitcoin Foundation – https://bitcoinfoundation.org/news/defi/solv-moves-to-chainlink/ (Published/Updated: May 8, 2026)
