$3 Billion DeFi Migration: LayerZero Stumbles, Chainlink Feasts

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Author: Nancy, PANews With multiple top-tier protocols stepping in to provide liquidity, bridge funding gaps, and advance on-chain remediation, rescue efforts for the Kelp DAO attack have seen substantial progress recently. However, compared to financial restoration, market trust remains far harder to repair. LayerZero, the cross-chain leader at the center of this vortex, is facing an accelerated exodus of protocols and has been forced to make a sharp U-turn in its stance within just a few weeks—shifting from initial finger-pointing to a public apology and the initiation of rectifications. Meanwhile, Chainlink has unexpectedly emerged as a beneficiary of this crisis, with its CCIP protocol absorbing a massive influx of migrated liquidity and showing significant growth in on-chain data. $3 billion in weekly migration: Chainlink reaps the security dividend As the largest DeFi security incident of 2026 to date, the Kelp DAO attack has accelerated the migration of on-chain liquidity. As the LayerZero security controversy continues to ferment, an increasing number of DeFi protocols have begun re-evaluating cross-chain risks and actively seeking more reliable havens. Over the past week, Chainlink has densely announced multiple migration cases. On May 9, Chainlink officially revealed that four protocols, including Kelp DAO, Solv Protocol, Re, and Tydro, have recently deprecated their original cross-chain bridge or oracle solutions in favor of migrating to Chainlink CCIP, with the total TVL of these protocols exceeding $3 billion. The official team even specifically added the phrase "The Great Migration" to build momentum for this ecosystem shift, signaling a highly competitive atmosphere. Behind this migration wave lies a realignment centered on security. Beyond the DeFi protocols realigning due to security concerns, Chainlink has also continued to gain favor with traditional financial institutions and crypto projects in recent months. In March of this year, Coinbase used Chainlink’s newly launched DataLink service to bring its exchange market data on-chain for the first time; Amundi, Europe’s largest asset manager, partnered with Spiko to launch a tokenized public fund based on Chainlink. In April, OpenAssets and Chainlink reached a strategic partnership to launch an institutional asset tokenization infrastructure solution; SIX Group, a major European stock exchange operator, partnered with Chainlink to bring Swiss and Spanish stock market data on-chain; AWS Marketplace launched Chainlink data services, connecting traditional cloud with blockchain. In May, the Depository Trust & Clearing Corporation (DTCC) announced the adoption of Chainlink to build a blockchain collateral management platform, aiming to achieve 24/7 near-real-time settlement; Huma Finance partnered with Chainlink to bring institutional-grade yield products into the multi-chain ecosystem. Accompanying this ecosystem expansion, Chainlink’s on-chain activity has also noticeably heated up. According to Santiment monitoring, the number of unique active addresses for Chainlink exceeded 282,000 and 264,000 on May 9 and 10 respectively, marking the highest record since September 2025, which the firm attributed primarily to the recent large-scale migration of DeFi protocol infrastructure. Meanwhile, official Chainlink data shows that the total value of cross-chain tokens has exceeded $61.8 billion, with CCIP transaction volume reaching $19.5 billion. Market confidence is also reflected in the changes in LINK token holdings. According to Santiment monitoring earlier this month, Chainlink "whales" and "sharks" holding between 100,000 and 10 million LINK have accumulated an additional 32.93 million LINK over the past month. Historically, this is typically a strong bullish signal. Over the past 30 days, LINK has risen by approximately 19.7%. LayerZero faces a trust crisis, issues emergency apology and rectification Currently, LayerZero is mired in a trust crisis. According to DefiLlama data, LayerZero’s weekly bridge volume has fallen to approximately $470 million, nearing historical lows. This attack incident has plunged LayerZero into a crisis of confidence. In the early stages of the hack, Kelp DAO attributed the vulnerability to LayerZero’s security issues. LayerZero subsequently denied responsibility, stating that several of Kelp DAO’s allegations regarding the rsETH security incident were entirely false. However, the controversy did not subside. Last week, LayerZero Labs co-founder and CEO Bryan Pellegrino engaged in a heated debate with several security researchers in the ETHSecurity Community Telegram group. The focus of the dispute was that LayerZero Labs could immediately upgrade default library contracts without a timelock, theoretically allowing for the forgery of cross-chain messages, which left over $3 billion in LZ OFT assets exposed to potential risks for some time. Security researcher Banteg pointed out that some mainstream projects

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