In brief
- Kraken will migrate its wrapped Bitcoin product, kBTC, from LayerZero to Chainlink’s interoperability protocol.
- The asset maintains a market cap of more than $260 million, and Kraken said it will use Chainlink for future wrapped assets, as well.
- LayerZero admitted it “made a mistake” with Kelp DAO’s setup, which was exploited for $292 million in April.
Crypto exchange Kraken is the latest firm to ditch LayerZero’s cross-chain interoperability technology following its role in last month’s $292 million Kelp DAO exploit.
As a result, the firm will migrate its existing wrapped Bitcoin product, kBTC, to Chainlink’s cross-chain interoperability protocol (CCIP). In the future, any wrapped Kraken products will also make use of Chainlink’s technology.
“Kraken chose Chainlink CCIP because it offers enterprise-grade infrastructure with strict security & risk management requirements,” the exchange posted on X.
Holders of the firm’s kBTC token, which is backed 1:1 by Bitcoin held in custody by Kraken, do not need to take any action at this time. The token holds a market cap of around $266 million at the time of writing.
Kraken’s migration extends the list of major crypto firms which have announced their intentions to detach themselves from LayerZero’s cross-chain tech after the interoperability protocol team admitted it “made a mistake” that led to the Kelp DAO exploit.
Prior to Kraken’s departure, Kelp DAO announced its intentions to shift to Chainlink’s technology and was followed by Solv Protocol, which said it would migrate the tech backing $700 million worth of Bitcoin-related assets to CCIP as well. Last week, on-chain reinsurance protocol Re also announced plans to make the switch from LayerZero to Chainlink.
“Together, Chainlink and Kraken can help accelerate the global adoption of crypto by unlocking utility and distribution for all Kraken Wrapped Assets across DeFi,” Kraken said.
Although the firm did not mention the Kelp DAO exploit, Kraken’s decision and those of the other crypto firms migrating away from LayerZero come after the April 18 exploit that was later attributed to Lazarus Group, the notorious North Korean state-sponsored hacker group.
Attackers from Lazarus were able to drain 116,500 rsETH liquid staking tokens from Kelp DAO’s infrastructure after “poisoning” internal RPCs used by LayerZero Labs, according to a postmortem from the interoperability firm.
Last week, the protocol said no other applications have been impacted and funds are not at risk.
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