Chaos Labs, one of Aave’s top risk managers, is leaving the DeFi lending giant’s ecosystem, marking the latest in a series of high-profile exits that have reshaped the protocol’s core team in recent months.
The departure follows previous exits of major contributors such as ACI (Aave Chan Initiative) and BGD Labs, indicating growing internal friction over the direction of the protocol.
Since 2022, Chaos Labs has been monitoring risks in Aave’s markets, helping the protocol grow from approximately $5 billion to more than $26 billion in total value while maintaining “zero material bad debt.” But despite that track record, the company says it can no longer continue under the current circumstances.
“The engagement no longer reflects how we believe risk should be managed,” Chaos Labs CEO Omer Goldberg said in a post on
A major bottleneck 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 coordination.
“Taking on something new in a responsible way requires new infrastructure… and the full operational burden of going from zero to one again,” Goldberg wrote.
The company also labeled the economy as unsustainable. Even with a proposed budget of $5 million, Chaos says it has operated at a loss and will continue to do so. “Even with a $1 million increase, we would still be exploiting 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 transitions between versions. “Brand continuity is not the same as system continuity,” Goldberg wrote.
For Aave, the departure leaves open questions about how risks will be managed during the next phase of growth.
CoinDesk reached out to Aave Labs for comment but did not receive a response by time of publication.
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