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Chaos Labs Ends Partnership with Aave
Chaos Labs has terminated its partnership with Aave after the parties failed to agree on the future collaboration framework in risk management and financing. Disagreements intensified ahead of the launch of Aave V4, where differences in approaches became critical.
Chaos Labs proposed to strengthen its role and concentrate risk management functions within a single counterparty. However, Aave did not support this initiative.
The collaboration between the companies began in November 2022. Chaos Labs was responsible for risk analysis and monitoring in Aave V2 and V3. During this period, the total locked value of assets reached $26 billion. The company's solutions were used to optimize liquidity and maintain protocol stability. The risk issue escalated after an incident where a user lost about $50 million. This drew increased community attention to security and led to the implementation of the Aave Shield mechanism, aimed at reducing the likelihood of dangerous operations.

Financial terms also contributed to the disagreements. According to sources, Aave Labs proposed increasing the budget to $5 million, but Chaos Labs declined. The company is also considering reducing its consulting activities in risk management.