Crypto Firm Secures $55 Million to Enhance DeFi Risk Management

Chaos Labs, a New York-based company specializing in risk management for decentralized finance (DeFi), has secured $55 million in an oversubscribed Series A funding round.

This investment, spearheaded by Haun Ventures, underscores the increasing need for sophisticated risk management tools in the DeFi sector.

Founded in 2021, Chaos Labs addresses issues of high volatility and coordination risks faced by DeFi protocols. The firm has recently doubled its size and expanded its client base, now supporting over 20 protocols such as GMX, Jupiter, and Aave. The new capital will bolster its risk assessment and data analysis capabilities.

The funding round saw participation from notable investors including Spartan Capital, Slow Ventures, F-Prime Capital, PayPal Ventures, Galaxy Ventures, and Lightspeed Venture Partners, as well as angel investors Francesco Agosti and Anatoly Yakovenko.

DeFi platforms, while growing, continue to grapple with significant risk management issues similar to traditional finance. Chaos Labs is working to automate risk management processes to better handle market fluctuations and reduce human error, aiming to improve the efficiency and security of these platforms.