A growing number of crypto projects are moving away from LayerZero infrastructure after the recent Kelp DAO exploit exposed fresh concerns around cross chain bridge security.
Lombard Finance has now joined that migration wave, announcing plans to move more than $1 billion in bitcoin backed assets to Chainlink’s Cross Chain Interoperability Protocol, better known as CCIP. The decision follows an internal security review conducted after the April exploit that drained nearly $292 million from Kelp DAO’s LayerZero powered bridge.
The broader shift has already pushed close to $4 billion in assets toward Chainlink’s interoperability network as decentralized finance protocols and exchanges reassess how they secure cross chain transfers.
Projects including Kraken, Solv Protocol, Re and Kelp DAO itself have either completed migrations or begun transitioning assets away from LayerZero in recent weeks.
Key Takeaways
- Lombard Finance is migrating over $1 billion in bitcoin backed assets from LayerZero to Chainlink CCIP following the $292 million Kelp DAO exploit.
- Nearly $4 billion in assets have now shifted toward Chainlink’s interoperability network as projects reassess bridge security risks.
- The Kelp DAO exploit exposed vulnerabilities in LayerZero’s verification setup, intensifying concerns around cross chain infrastructure security.
- Major projects including Kraken, Solv Protocol, and Re have also moved assets or integrations toward Chainlink CCIP.
- The migration trend signals that DeFi protocols are increasingly prioritizing security and verification standards over speed and lower costs in cross-chain operations.
Security Concerns Trigger Industry Shift
The Kelp DAO exploit became one of the largest DeFi security incidents of 2026 and quickly changed how many protocols evaluate bridge infrastructure. According to reports tied to the incident, attackers compromised internal RPC systems and manipulated a LayerZero verification setup that relied on a single decentralized verifier network path. The exploit allowed fraudulent cross chain messages to be processed, ultimately leading to the loss of more than 116,000 rsETH.
While LayerZero later acknowledged mistakes connected to the configuration used in the exploit, the incident triggered wider concerns about bridge architecture and verification standards across DeFi.
For many projects, bridge infrastructure is no longer viewed as a simple backend service. It is increasingly treated as a core security layer responsible for protecting billions of dollars in user assets.
Lombard said its decision was directly influenced by those concerns.
The company added that it has maintained zero security incidents and full uptime since launch.
Lombard Moves Bitcoin Backed Assets to CCIP
Lombard’s migration will involve bitcoin backed assets including LBTC and BTC.b across several blockchain networks.
The first phase of the transition will cover Solana, Etherlink, Berachain, Corn and TAC. The protocol also confirmed that support for LayerZero on Morph and Swell will gradually be phased out. In addition to adopting Chainlink CCIP, Lombard is integrating Chainlink’s Cross Chain Token standard. The framework allows assets to move between chains through a burn and mint model rather than relying entirely on wrapped liquidity systems. The protocol also plans to introduce its own Security Consortium layer to strengthen transaction verification and cross chain controls.
Jacob Phillips, co founder of Lombard, said the company concluded that Chainlink CCIP currently offers the strongest security model available for cross chain transfers.
The migration places Lombard among the largest protocols to move away from LayerZero since the Kelp DAO exploit.
Chainlink Emerges as Main Beneficiary
The growing migration trend has strengthened Chainlink’s position in the increasingly competitive interoperability market.
Chainlink CCIP has become one of the primary alternatives to LayerZero for protocols looking to move assets and data across multiple blockchain ecosystems.
Several projects cited Chainlink’s independent node operators, audited infrastructure, built in transaction rate limits and institutional security certifications as key reasons for switching.
Kraken recently selected CCIP as the exclusive interoperability layer for its wrapped bitcoin product kBTC and future wrapped assets. Solv Protocol also migrated roughly $700 million in tokenized bitcoin products to Chainlink infrastructure, while Re moved approximately $475 million in total value locked.
Combined, the migrations now represent roughly $4 billion in assets transitioning toward CCIP.
Johann Eid, Chief Business Officer at Chainlink Labs, described the trend as a broader “flight to safety” across the crypto industry.
Chainlink’s infrastructure currently routes tens of billions of dollars in cross chain transaction activity and has positioned itself as a more security focused interoperability solution for institutional and large scale DeFi applications.
Pressure Mounts on LayerZero
The latest departures create mounting pressure on LayerZero as concerns grow around the platform’s long term trust model.
LayerZero remains one of the largest interoperability protocols in crypto and continues to process billions in bridged assets. However, the reputational damage tied to the Kelp DAO exploit has clearly affected confidence among major ecosystem partners.
The protocol has since removed support for certain single verifier configurations and announced plans to strengthen verification requirements across its network. Still, the recent migrations suggest many protocols are no longer willing to wait for gradual upgrades while managing large pools of capital. The reaction has also exposed a broader issue inside DeFi. As tokenized assets, staking products and institutional capital continue expanding across multiple blockchains, cross chain infrastructure has become one of the industry’s most critical risk points.
Bridge exploits have historically accounted for some of the largest losses in crypto, with attackers frequently targeting interoperability systems due to the enormous liquidity they control.
Cross Chain Security Becomes Top Priority
The latest migration wave signals a wider change in how DeFi projects approach infrastructure decisions.
Rather than prioritizing speed or low cost alone, protocols are increasingly focusing on security architecture, decentralization standards and independent verification systems.
That shift could reshape competition among interoperability providers over the coming year.
For Chainlink, the recent inflows strengthen its role beyond price oracles and data feeds into a broader blockchain infrastructure provider for institutional and decentralized finance applications.
For LayerZero, the challenge now is restoring confidence before more projects decide to move their assets elsewhere.
With billions of dollars already migrating after a single exploit, the market appears to be sending a clear message that bridge security has become one of the defining issues for crypto infrastructure in 2026.
