LayerZero Axes Support for 14 Chains Amid KelpDAO Fallout

LayerZero, a cross-chain interoperability provider, has announced that it will withdraw off-chain support for 14 low-activity chains by September. The move comes after a massive hack on KelpDAO, one of the largest DeFi exploits in 2026, which resulted in losses of $292 million.

The affected networks include Cronos zkEVM, Degen, Skale Europa, Superposition, Shrapnel, and others. As a result, assets such as USDT and USDC on these chains may be stranded if not moved before the shutdown.

LayerZero's decision is seen as a strategic play to reduce its security risk exposure and counter growing competition from Chainlink CCIP, which has attracted over $15 billion in assets since the KelpDAO hack. The firm has massive financial backing from top-tier VC firms, including Sequoia Capital and Andreessen Horowitz.

The move is also seen as a response to the KelpDAO exploit, which stemmed from LayerZero's recommended '1-of-1' DVN setup that doesn't provide enough verification before large minting or fund transfers are approved. Since the same loophole can be used with low-adopted reserve assets, Aave has stopped supporting most of them.