Ethereum liquid restaking protocol Ether.fi announced on July 10 that it has temporarily paused LayerZero-powered cross-chain transfers for weETH and eETH as it investigates the recent Kelp rsETH security incident. The protocol also suspended Teller contracts for Liquid (ETH, BTC, USD), sETHFI, and eBTC, halting both cross-chain transfers and deposit/withdrawal functions for these products.
Background and Protocol Response
The pause follows reports of the Kelp DAO rsETH exploit earlier this month. LayerZero disclosed an attack on May 20 and subsequently rebuilt its infrastructure, while Aave and other protocols confirmed the transfer of Kelp rsETH via LayerZero. In its statement, Ether.fi assured users that its Liquid Vaults are not directly affected by the rsETH issue. The team is working closely with multiple security partners to determine the root cause and formulate a solution, with further updates expected imminently.
Affected Products and Market Reaction
The suspension impacts cross-chain transfers of liquidity restaking tokens weETH and eETH, as well as the full Teller contract functionality for Liquid series (ETH, BTC, USD), sETHFI, and eBTC. Despite the security concerns, related token prices remained buoyant: EETH +1.48%, ETHFI +2.72%, RSETH +1.35%, WEETH +1.78%, and ZRO (LayerZero’s token) +4.72%. The overall market sentiment reflects confidence in Ether.fi’s handling of the situation.
Ripple Effects Across the Ecosystem
The incident has also spurred response from other projects. Turtle strengthened its risk controls following the LayerZero exploit, while Aave confirmed details of Kelp DAO’s rsETH transfer. As one of the largest liquid restaking protocols, Ether.fi’s decision to halt cross-chain transfers may prompt other platforms to reassess bridge security. Analysts highlight the growing need for coordinated security measures in the multi-chain landscape and the importance of rapid response protocols to safeguard user assets.
Ether.fi has pledged to restore normal services once the investigation concludes and advises users to monitor official channels. A more detailed incident report and follow-up actions are expected within the coming week.