Taiko, an Ethereum layer-2 blockchain, has warned users to withdraw assets from its bridges following a hack that drained $1.7 million. The exploit compromised the chain's verification mechanism, rendering bridge security assumptions invalid. This is the latest in a series of at least 23 crypto exploits this month.
Security exploits on DeFi bridges are deterring institutional investors, despite stablecoin and tokenized asset growth. Losses from bridge hacks total $328.6 million in 2026, making 'Do Your Own Research' difficult due to system complexity. Institutions demand traditional finance-like controls, potentially undermining DeFi's core principles.
The attacker behind the Verus bridge exploit returned 4,052 ETH ($8.5M) to the project after Verus offered a 1,350 ETH bounty. This represents 75% of stolen funds, with the exploiter keeping the bounty. DeFi hacks totaled $634M in April, with losses falling in May.
Consensys and Ethereum co-founder Joe Lubin has joined DeFi United, committing up to 30,000 ETH to recover rsETH backing after a $290 million exploit on Kelp DAO's LayerZero bridge drained approximately 116,500 rsETH on April 18. The initiative, led by Aave DAO participants including Lido, EtherFi, Ethena, Mantle and Frax, aims to restore liquidity and stabilize rsETH markets still facing disruptions. The exploit caused up to $200 million in bad debt on Aave and triggered pauses across dozens of DeFi protocols. Circle's venture arm is also purchasing AAVE tokens to support the protocol.
Aave’s supplied balance has tanked since the Kelp DAO bridge exploit, as users pull funds amid uncertainty over how much of the rsETH-linked shortfall the protocol will ultimately absorb.
LayerZero attributed the $292 million KelpDAO bridge exploit to North Korea's Lazarus Group's TraderTraitor subunit. Attackers drained 116,500 rsETH on Saturday by exploiting a single-verifier architecture, nearly stealing an additional $100 million before being stopped. The attack triggered $10 billion in withdrawals from Aave and exposed critical vulnerabilities in cross-chain bridge security.
