Chaos Labs has exited the Aave ecosystem after three years as its primary risk service provider, citing disagreements over risk management and a proposed $5 million budget arrangement.
The departure comes as Aave prepares to migrate to its V4 architecture, a transition that Chaos Labs argued would significantly increase operational complexity and risk exposure.
“This decision was not made in haste,”
Said Chaos Labs founder Omer Goldberg, adding that:
“The engagement no longer reflects how we believe risk should be managed.”
Aave founder Stani Kulechov said the split was amicable but claimed Chaos sought to become the sole risk provider while replacing existing infrastructure such as Chainlink oracles, which Aave declined.
Goldberg said the V4 transition would require managing both V3 and V4 simultaneously, doubling workload and increasing legal uncertainty, stating:
“If things work, the work is invisible. If things break, the blame is not.”
Chaos Labs had been integral to Aave’s risk framework since 2022, supporting loan pricing and market risk across V2 and V3 as total value locked grew to $26 billion and cumulative lending surpassed $1 trillion.
The exit follows heightened scrutiny of Aave’s risk systems after a $50 million user loss in March and ongoing governance tensions over funding and control within the protocol’s decentralised structure.
At the time of reporting, Aave price was $93.05.