Institutions and DeFi Protocols Accelerate Sell-off of LayerZero Cross-chain Solutions, Shift to Safer Chainlink CCIP
DeFi protocol Lombard announced the migration of over $1 billion in Bitcoin-backed assets (LBTC and BTC.b) from LayerZero to Chainlink CCIP, becoming the latest migration project following the Kelp DAO attack.
This migration prioritizes chains such as Solana, Etherlink, Berachain, Corn, and TAC, while terminating the use of LayerZero on Morph and Swell. Lombard stated that this decision stemmed from a comprehensive security review after the April attack incident.
In market mechanisms, institutions and DeFi protocols are accelerating the sell-off of LayerZero cross-chain solutions, turning to the safer Chainlink CCIP. This risk-averse wave has led to approximately $4 billion in assets being completed or in the process of migration, benefiting Chainlink's infrastructure while putting pressure on the LayerZero protocol.
Source: Public Information
ABAB AI Insight
Lombard previously deeply integrated LayerZero to issue Bitcoin-backed tokens. This complete switch continues the migration path of Kelp DAO, Solv Protocol, Re, and Kraken, all of which quickly completed security audits and infrastructure replacements after the attack incident.
In terms of capital pathways, Lombard chose Chainlink CCIP as its exclusive cross-chain solution, anchoring over $1 billion in assets on independent node operators, throttling mechanisms, and auditing infrastructure, motivated by the need to reduce single-point verification risks and secure institutional-level Bitcoin DeFi liquidity entry.
Similar cases include Aave freezing rsETH after the Kelp incident and coordinating migration. The current cross-chain infrastructure sector is transitioning from an expansion phase with LayerZero to a security and compliance phase with Chainlink, with multiple protocols acting in concert to accelerate industry consolidation.
Essentially, this represents a transfer of pricing power: LayerZero exposed systemic vulnerabilities due to simplified DVN configurations for high-value asset usage, leading to a shift in trust and market share towards Chainlink's multi-validator architecture. The root mechanism is the uncompromising demand for security redundancy from institutions and large Bitcoin-backed assets.
ABAB News · Cognitive Law
After an attack exposure, $4 billion in assets will never return.
Security is never a cost, but the ultimate pricing power for institutions choosing infrastructure.
When large assets migrate, cross-chain protocols shift from a technical race to a battlefield of trust and audits.