Nethermind leaves LayerZero for Chainlink as $15 billion exodus widens

The Aug. 19 move widens a $15 billion migration from LayerZero to Chainlink after an April exploit drained $292 million from a Kelp DAO bridge.

"Being a node operator carries real responsibility for a network's reliability, and that's consistent with how we approach every engineering commitment we make," Daniel Celeda, chief executive officer at Nethermind, said.

Nethermind will help secure Chainlink's Cross-Chain Interoperability Protocol, known as CCIP, and its Data Feeds. The firm supports more than 16,000 Ethereum validators and over $5 billion in delegated assets. It had served as one of the decentralized verifier networks that LayerZero applications could select to confirm cross-chain messages.

The migration brings the value covered by disclosed LayerZero-to-Chainlink moves to nearly $15 billion, pressuring LayerZero's verifier network as Chainlink consolidates its hold on institutional cross-chain infrastructure. Nethermind did not disclose a timeline for completing the transition.

Nethermind's shift follows a $292 million bridge exploit

The decision arrives four months after hackers drained 116,500 rsETH, worth about $290 million at the time, from Kelp DAO's LayerZero-powered bridge in an April 18 attack that involved a forged cross-chain message and a single-verifier configuration. Kelp DAO moved its rsETH cross-chain infrastructure to Chainlink in May while disputing LayerZero's account of the security setup. LayerZero said it would stop approving messages for applications secured by only one verifier.

Nethermind did not say whether the Kelp exploit triggered its review, and its announcement did not identify a security failure at LayerZero.

Chainlink consolidates institutional cross-chain infrastructure

Other large projects have made comparable decisions since the attack. BitGo selected Chainlink in August as the exclusive cross-chain provider for Wrapped Bitcoin, replacing LayerZero across a WBTC ecosystem then valued at about $7.3 billion. Aave adopted CCIP in July as the default system for cross-chain functions across its app and Stable Vaults.

Wyoming's Stable Token Commission completed its migration from LayerZero to Chainlink on Aug. 18 following a state security review, naming disclosure practices and operational security among its concerns. The commission chose CCIP as the exclusive cross-chain provider for its Frontier Stable Token, which is issued by a U.S. public entity and available on eight blockchains including Ethereum, Solana, Base, Arbitrum and Avalanche.

Founded in 2017, Nethermind develops one of Ethereum's main execution clients and employs more than 200 people across client development, cryptography and blockchain security. Its infrastructure clients include EtherFi, Gnosis, Lido, StarkWare, World and Arbitrum. Under the Chainlink arrangement, the firm will operate a node within Chainlink's network and supply engineering tools and integration support to developers.

This article is for informational purposes only and does not constitute investment advice.