Chaos Labs, one of Aave’s main risk managers, is leaving the DeFi lending giant’s ecosystem, marking the latest in a string of high-profile contributors who have reshaped the protocol’s core operations team in recent months.
The departure follows earlier exits from major contributors such as ACI (Aave Chan Initiative) and BGD Labs, signaling growing internal friction over the protocol’s direction.
Since 2022, Chaos Labs has monitored risk across Aave’s markets, helping the protocol grow from around $5 billion to more than $26 billion in total value locked while maintaining “zero material bad debt.” But despite that track record, the company says it can no longer continue under current conditions.
“The engagement no longer reflects how we believe risk should be managed,” Omer Goldberg, CEO of Chaos Labs, said in a post on X, pointing to a “fundamental discrepancy” with Aave’s evolving strategy.
A key sticking point is Aave’s V4 upgrade, which introduces a new architecture and significantly expands the scope of risk management. Chaos argues that this shift increases both operational complexity and responsibility, without a corresponding increase in resources or alignment.
“Taking on something new responsibly requires new infrastructure … and the full operational burden of going from zero to one again,” Goldberg wrote.
The company has also marked finances as unsustainable. Even with a proposed budget of $5 million, Chaos said it has operated at a loss and will continue to do so. “Even with a $1m raise, we would still be running Aave’s risk with negative margins,” Goldberg said.
At the same time, Chaos warned that the loss of experienced contributors increases operational risk, especially as Aave switches between versions. “Continuity of fire is not the same as continuity of system,” Goldberg wrote.
For Aave, the departure leaves open questions about how the risk will be managed through its next growth phase.
CoinDesk reached out to Aave Labs for comment, but did not receive a response by the time of publication.
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