Kraken's decision to abandon LayerZero was triggered by recent security issues, the most significant of which was the April hack of the Kelp DAO protocol bridge, resulting in the theft of approximately $292 million. Vulnerabilities in LayerZero's single-verifier architecture sparked a crisis of confidence in the market. In contrast, Chainlink CCIP employs a fundamentally different security model that requires consensus from multiple independent nodes, significantly reducing the risk of exploits.
In May 2026, Kelp DAO, Solv Protocol, and Re also migrated to the Chainlink infrastructure. As a result of this cascading effect, LayerZero lost projects with a total value locked (TVL) ranging from $2 to $3 billion.
In December 2025, Kraken initially selected LayerZero and its OFT standard as its interoperability partner for its wrapped Bitcoin (kBTC). The integration was intended to enable customers to seamlessly transfer kBTC across more than 150 blockchains without loss of value or slippage.