Chaos Labs Exits Aave Ecosystem, Citing Fundamental Disagreement on Risk Management

On April 7, Chaos Labs announced that it will end its role as a core contributor to the Aave ecosystem after three years. The team stated that there are fundamental disagreements regarding ‘risk management approaches,’ which have continued to widen as the protocol develops. Chaos Labs pointed out three main reasons: · Loss of core contributors has significantly increased operational pressure and risk. · Aave V4 expands the scope of risk management while increasing operational and legal burdens. · Long-term participation has been in a state of loss, and even with increased budgets, profitability remains difficult to achieve. The team stated that the current path either requires lowering execution standards or continuing to incur losses, both of which are unacceptable, leading to the decision to exit.