Aave Risk Manager Chaos Labs Exits as V4 Dispute Fuels Governance Tension

TLDR

• Chaos Labs said it will exit Aave after nearly three years as a core risk provider.
• The firm said Aave V4 would require new tools, new models, and dual support for V3 and V4.
• Chaos Labs said it ran the Aave mandate at a loss for the past three years.
• Aave Labs reportedly offered $5 million, while Chaos Labs estimated it needed $8 million.
• The exit follows earlier departures by BGD Labs and Aave Chan Initiative.

Chaos Labs will leave its role as Aave’s official risk manager after nearly three years. The firm said the split followed a dispute over V4 scope, staffing, and budget. Its exit adds pressure to Aave as the protocol prepares for a long V4 rollout.

Chaos Labs says Aave risk work no longer matches protocol needs

Chaos Labs said it had priced every loan started on Aave since November 2022. It also said it managed risk across all Aave V2 and V3 markets. The firm stated that this work produced zero material bad debt during its term.

Founder Omer Goldberg said the decision was not made quickly. He wrote that the engagement no longer matched how the firm believes risk should be managed. He added that the issue went beyond a simple pay dispute.

Chaos Labs said Aave V4 changes the job in a major way. The firm described V4 as a new lending protocol with a different architecture. It said that shift would bring more legal, technical, and operating work.

The firm also said the move to V4 would not reduce its V3 duties. Instead, both versions would need support during a long migration period. Goldberg wrote, “History suggests these transitions take months and even years.”

Budget gap and staffing changes added to the split

Chaos Labs said it had operated the Aave mandate at a loss for three years. The firm said its 2025 budget was about $3 million. It also said Aave Labs offered $5 million to retain the team.

Goldberg said that amount still would not cover the expanded work. Chaos Labs estimated that overseeing both V3 and V4 would require at least $8 million. He said that figure still excluded some legal and operating risks.

The firm compared its budget with Aave’s reported 2025 revenue. Chaos Labs said Aave generated $142 million in revenue last year. It added that its budget was about 2 percent of protocol revenue.

Goldberg argued that this level was below common spending levels for risk and compliance systems. He said banks often spend between 6 percent and 10 percent on that work. Still, he said the budget issue was only part of the dispute.

Exit follows broader governance strain around Aave V4

Chaos Labs linked its exit to recent contributor departures at Aave. It said BGD Labs and Aave Chan Initiative had already decided to step away. The firm described itself as the last remaining technical contributor from the earlier V3 group.

That claim matters because Aave is moving into a new development phase. Chaos Labs said the V4 transition would require new infrastructure and new simulations. It also said the codebase has not yet been battle-tested.

Aave founder Stani Kulechov offered a different view of the rollout. He said the V4 launch would be controlled and prolonged for security reasons. He wrote, “Aave V3 remains fully operational. There is no forced migration.”

The dispute comes during a wider governance debate inside Aave. Kulechov recently proposed turning Aave Labs into a DAO subsidiary. That plan followed criticism over Aave Labs’ earlier decision to redirect a DAO revenue stream to a corporate wallet.

The post Aave Risk Manager Chaos Labs Exits as V4 Dispute Fuels Governance Tension appeared first on CoinCentral.