DeFi Projects Shift $3 Billion to Chainlink CCIP After KelpDAO Hack

DeFi projects are shifting their cross-chain infrastructure to Chainlink’s Cross-Chain Interoperability Protocol, or CCIP, after the KelpDAO hack, CryptoSlate reported on May 11.

More than $3 billion in DeFi capital has recently moved from LayerZero-based infrastructure to Chainlink CCIP, the crypto media outlet said.

Chainlink said four projects — KelpDAO, Solv Protocol, Re and Tydro — are phasing out existing bridge and oracle systems and adopting CCIP.

The shift followed the KelpDAO hack in April. The incident resulted in about $292 million in losses, bringing cross-chain bridge security back into focus as a key market risk.

Chainlink’s native token LINK has also responded. Based on CryptoSlate data, the token recently rose 15% to $10.52, its highest level since January.

On-chain analytics firm Santiment said exchange reserves of LINK fell by about 13.5 million tokens over the past five weeks. That equals more than 10.5% of exchange holdings as of early April.

CCIP is built on Chainlink’s decentralized oracle network and supports the transfer of data and assets across multiple blockchains. Chainlink said it operates more than 2,000 oracle networks and secures more than $110 billion in value.

The KelpDAO incident has also fueled concerns in some quarters about LayerZero’s security architecture. In an official statement on May 9, LayerZero said it was a mistake to allow high-value applications to rely on a single verification system without adequate safeguards.

LayerZero added that the incident was an isolated case that affected 0.14% of applications on the network and about 0.36% of total value locked, or TVL.