- Chaos Labs steps down as Aave’s risk manager after 3 years
- Disagreement over V4 risk approach and protocol expansion
- Financial strain and governance issues also played a role
- Marks another major contributor leaving the ecosystem
Key Contributor Steps Away
Chaos Labs, one of the most important infrastructure providers for Aave, has announced it will no longer act as the protocol’s risk manager. The firm has been responsible for pricing loans and managing risk across Aave markets since 2022.
Its departure follows other exits, including BGD Labs and the Aave Chan Initiative, signaling deeper structural changes inside the ecosystem.
Concerns Around Aave V4
A major reason for the split is disagreement over how risk should be handled as Aave V4 rolls out. The new version introduces a more flexible system designed to expand into new markets.
However, Chaos Labs argues that this expansion significantly increases complexity and risk, especially during the transition period where both V3 and V4 must be supported.
Governance and Financial Pressure
The firm also cited financial challenges, saying it had been operating at a loss. Aave reportedly offered a higher budget, but Chaos Labs stated that the core issue was not funding, but strategic misalignment.
The situation highlights ongoing tensions between DAO governance, protocol growth, and operational sustainability in DeFi.
