Risk manager Chaos Labs is stepping away from Aave after three years, saying the protocol’s risk setup no longer fits the job.
Chaos Labs, an automated risk management platform, is walking away from Aave, the largest DeFi lending platform by allocated capital, after three years, saying the protocol’s risk setup no longer fits how it thinks the job should be done.
In a Monday forum post, April 6, the firm’s founder Omer Goldberg said the decision to leave Aave was due to the a “fundamental misalignment on how risk should be managed at Aave.”
Amid the latest departure, AAVE fell more than 6% to around $91.8, according to CoinGecko data.
Chaos Labs Clashes With Aave Over Budget
Goldberg said Aave Labs was willing to raise the budget to $5 million, but the risk manager argued it needed closer to $8 million to cover V3, V4 and the go-to-market work it was already doing, even as Aave’s 2025 revenue came in at about $142 million and the DAO treasury held roughly $140 million.
For regular users, the bigger issue is the V4 transition. Aave says the new version changes how funds are shared and how liquidations work. However, the risk manager claims this isn’t a simple upgrade, because the old system still needs to run 24/7 while the new one goes live, meaning both have to be managed at the same time.
The exit also comes after two other key teams left Aave earlier this year. BGD Labs, which handled much of the protocol’s core development and security, exited in April, while ACI, the team focused on governance and growth, also stepped away, leaving fewer original contributors behind.
