Israel and New York, February 21, 2023 — With participation from Coinbase, Uniswap, Lightspeed, Bessemer, Hashkey, and renowned angel investors like Balaji Srinivasan and Naval Ravikant, Chaos Labs, the first highly automated economic security system for crypto protocols, announced that it has raised USD 20M in seed funding.
This funding round was led by Galaxy and PayPal Ventures. Chaos Labs will use the cash to increase its product offerings and develop a full line of risk and security solutions. Major Decentralized Finance (“DeFi”) customers, such as Aave, Chainlink, Uniswap, BENQI, and Osmosis, have partnered with Chaos Labs in its first year of operations to secure and optimize the protocols against manipulation and black swan market events and to provide capital optimization recommendations.
Protecting crypto protocols against economic system exploitation and inadequate risk criteria has never been more crucial, and new security paradigms are needed. According to The Block, as bad actors and nation-states employ more inventive techniques to target on-chain protocol flaws, the total amount of money lost to DeFi exploits in 2022 increased by 48% to $2.05 billion. To address this, Chaos Laboratories was established, safeguarding procedures against financial weaknesses and instances of market manipulation. The firm operates best-in-class security processes, including comprehensive agent- and scenario-based simulations, and is the cryptocurrency industry’s first automated risk management platform.
Teams may improve user capital efficiency and respond more swiftly to rapidly shifting crypto marketplaces by working with Chaos Labs, which will help them stay competitive without compromising the security of their protocol.
According to Chaos Labs CEO and Founder Omer Goldberg, financial risk management must progress according to the world’s transition from the opaqueness of traditional banking to a more transparent DeFi system. “To confirm and validate that their economic system is safe against hackers and unexpected volatility, Chaos Labs believes that any DeFi protocol must routinely undergo rigorous risk assessment. We’ve assembled a team of highly skilled security and infrastructure experts, striving to address this by implementing top-notch security and risk management techniques while simulating countless economic scenarios on-chain.”
Chaos Labs has grown tremendously since its founding in October 2021 and has attracted notable industry clients, including Aave, BENQI, Osmosis, and dYdX. The Aave community has authorized the updated Aave V3 risk optimization and mitigation methodology for use by Chaos Labs. Aave received a first-of-its-kind, public risk parameter suggestion tool from Chaos Labs, which engaged and informed the community on risk-related choices. Chaos Labs was also given an Aave grant to create a health and liquidation risk analytics dashboard. Most recently, the district chose Chaos Labs further to expand risk analysis and management to Aave V2 markets and facilitate the transition from V2 to V3.
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