Chaos Labs raises $20M in Seed funding to automate on-chain risk optimization

Israeli startup Chaos Labs, which develops a highly automated economic security system for crypto protocols, announced that it has raised $20M in seed funding, led by Galaxy and PayPal Ventures.

In its first year of operations, Chaos Labs has partnered with major Decentralized Finance (”DeFi”) customers, including Aave, Chainlink, Uniswap, BENQI, and Osmosis, to secure and optimize the protocols against manipulation and black swan market events, while also offering capital optimization recommendations.

The company has developed an automated risk management platform for crypto, operating best-in-class security practices including robust agent- and scenario-based simulations. Using the solution, teams can optimize user capital efficiency and more quickly adapt to ever-changing crypto markets – helping them stay competitive without compromising on the security of their protocol.

“As the world moves from the opacities of traditional finance to a more open DeFi system, financial risk management must advance accordingly,” said Chaos Labs’ CEO and Founder, Omer Goldberg. “At Chaos Labs, we believe that every DeFi protocol must regularly conduct robust risk testing to verify and validate that their economic system is secure against hackers and unanticipated volatility.

“The success of crypto depends upon on-chain risk management and mitigation, and Chaos Labs is the type of software-solution the industry needs,” said Mike Giampapa, General Partner at Galaxy Ventures. “We believe Chaos Labs plays a critical role in building standardized practices for protocol safety as more assets move on-chain.”