Chaos Labs exits risk management engagement with Aave due to misalignment, citing V4 complexity, departures, and budget constraints; follows BGD Labs and ACI exits.
Regulation & Gov ·
Chaos Labs announced it will terminate its risk management engagement with Aave, citing misalignment in risk management approach as the primary reason. The firm also pointed to internal contributor departures, heightened complexity and operational burden stemming from V4, and insufficient budget to support its expanded risk responsibilities. This departure follows earlier exits by BGD Labs and ACI from similar roles at the protocol.
The termination reflects underlying tensions over governance structure and resource allocation within Aave's risk oversight framework. V4's architectural scope appears to have been a flashpoint, with disagreements emerging over how risk management should evolve alongside the upgrade. The cumulative strain of staffing losses, operational scaling demands, and budget constraints left Chaos Labs unable to sustain its mandate at the required level.
What remains unclear is whether Aave intends to replace these functions internally, seek alternative risk management providers, or restructure its governance approach to address the concerns raised. The successive departures of three major contributors to risk oversight suggest systemic friction rather than isolated disputes, but the protocol has not yet signaled its response strategy.