Bitcoin DeFi Giant Lombard Exits LayerZero Amid Massive Hack Fallout

• Lombard Finance migrates $1B+ in Bitcoin assets to Chainlink CCIP after LayerZero’s $292M Kelp DAO security breach.
  
• North Korean hackers poisoned LayerZero’s internal RPCs, triggering a mass DeFi exodus toward Chainlink’s infrastructure.
  
• Kraken, Solv Protocol, Re, and Kelp DAO have also dropped LayerZero for Chainlink CCIP following the catastrophic hack.

Lombard Finance, one of Bitcoin DeFi’s largest protocols, has cut ties with LayerZero following the catastrophic Kelp DAO exploit. 

The $292 million hack exposed critical vulnerabilities in LayerZero‘s infrastructure. After an internal security review, Lombard confirmed a full migration to Chainlink’s Cross-Chain Interoperability Protocol (CCIP).

The decision affects more than $1 billion in Bitcoin-backed assets distributed across several blockchain networks.

Lombard Breaks from LayerZero After $292 Million Breach

The Kelp DAO exploit sent shockwaves across the DeFi space last April. North Korean hackers compromised LayerZero’s internal RPCs, draining $292 million from Kelp DAO infrastructure. 

LayerZero later acknowledged it “made a mistake” with its internal configurations. The firm admitted it created unnecessary risk that it simply failed to detect internally.

Lombard responded by launching an extensive internal security review of its entire cross-chain technology stack. That review pointed directly toward Chainlink CCIP as the stronger alternative. 

The protocol wasted no time acting on those findings. It announced a complete departure from LayerZero across all supported networks.

The migration covers Solana, Etherlink, Berachain, Corn, and TAC. Lombard will also fully deprecate its LayerZero usage on Morph and Swell. 

The two affected tokens, LBTC and BTC.b, collectively hold over $1 billion in market capitalization. LBTC alone carries $816 million, functioning as a 1:1 Bitcoin-backed liquid staking token.

Lombard made its position clear in a post on X, stating that the move “prioritizes the safety and security of all Lombard users” and reflects its commitment to maintaining zero security incidents and 100% uptime since day one. 

Co-Founder Jacob Phillips added that after extensive internal reviews, “it became clear that Chainlink CCIP provides the highest level of cross-chain security in the industry.” 

The protocol made clear that its security standard will not change as it continues to scale. User protection remains the driving priority behind the infrastructure shift.

Chainlink CCIP Absorbs DeFi’s LayerZero Exodus

Lombard is far from alone in walking away from LayerZero after the hack. Kraken made a similar move just one day earlier, choosing Chainlink CCIP to power its kBTC wrapped Bitcoin token. 

Solv Protocol, Re, and Kelp DAO itself have also migrated away from LayerZero. Billions of dollars in total value locked are now moving toward Chainlink’s infrastructure.

Chainlink CCIP brings a defense-in-depth architecture secured by decentralized oracle networks. Each bridge lane requires a minimum of 16 independent, security-reviewed node operators. 

Built-in rate limits act as circuit breakers during worst-case scenarios. The platform also holds SOC 2 Type 2 and ISO/IEC 27001:2022 institutional certifications.

As part of the migration, Lombard is adopting Chainlink’s Cross-Chain Token standard. This burn-and-mint bridging model supports a single canonical token across all chains. 

Lombard also noted that with CCIP, the firm benefits from “its secure-by-default foundation” while gaining the ability to “configure additional security layers on top.” That structure removes vendor lock-in and preserves flexibility going forward.

Chainlink Labs Chief Business Officer Johann Eid welcomed the move, saying the migration marks “an important milestone in establishing a standardized, secure cross-chain foundation for Bitcoin-backed assets.” 

He added that the shift aligns with a broader DeFi trend toward infrastructure that “meets the highest standards of security and reliability required to support institutional adoption.”

Lombard also gains the ability to layer its own Security Consortium on top of CCIP for added transaction validation. That setup gives the protocol direct control over how its assets move between chains.

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