New York based blockchain company Chaos Labs has just secured $55 million in Series A funding with Haun Ventures as the lead investor. The funding will arrive as Chaos Labs, which was established in 2021, seeks to scale up a platform to meet the increasing need for risk management in DeFi. Since the emergence of DeFi, reliable on-chain risk management solutions have become scarce, and Chaos Labs is likely to become one of the leaders in this market.
The Funding Round and Key Investors
This updated funding round proves that the DeFi sector demands more solutions for their current and future needs, and Chaos Labs has successfully raised $55 million in this attempt to demonstrate its competence and adaptability to the emergence of such demands. It was announced that the Series A round would be led by Haun Ventures, a company that specializes in investing in firms which are driving and adopting the novel blockchain technology. Other significant investors included F-Prime Capital, Slow Ventures and Spartan Capital. Further, the round attracted other big shot investors which included Lightspeed Venture Partners, Galaxy Ventures and PayPal Ventures.
Equity funding by angel investors also featured in the funding of this project. Among them were Solana co-founder Anatoly Yakovenko and Francesco Agosti—co-founder of the Polyphony crypto-wallet, which reached near-iconic popularity with its brand name Phantom. It is therefore not surprising that Chaos Labs have embraced the task of securing and growing DeFi protocols.
“The support from such a diverse group of investors reaffirms the importance of automated risk management in DeFi,” said Omer Goldberg, Founder and CEO of Chaos Labs. “We are excited to scale our platform and continue to protect the growing number of DeFi protocols.”
Chaos Labs’ Platform and Its Growing Impact
Since its establishment, Chaos Labs has rapidly grown its client portfolio with over 20 DeFi platforms, including Aave, GMX, and Jupiter. These protocols have come to Chaos Labs for its full range of on-chain risk management services that enable the prevention of risks that have got to do with volatility and other factors such as smart contract vulnerabilities and sudden shifts in liquidity.
They include real-time data oracles for DeFi platforms, mostly used for dashboard data as well as risk alerts in real-time to ensure that DeFi platforms are adaptive to the market data. Through performing certain risk associated activities, Chaos Labs minimizes the necessity of intervention, the process of which is generally slow and error-prone.
In the continuously-developing fields of DeFi, it is possibly the most important and valuable feature – adaptability. Several data sources originate from the chaos labs platform and include various parameters revised in real-time including the collateral requirements and liquidation ratios. ‘All applications in DeFi on-chain currently are effectively unchangable and have outdated parameter settings,’ Goldberg elaborated. ‘It can take up to 72-96 hours from the time when a risk manager decides that changes are needed to the time when these changes are implemented on-chain. ’
Apart from increasing security in decentralized platforms, Chaos Labs automation also guarantees that such platforms will remain decentralized; there are no middlemen who will be making decisions and thus slow down the process or bring in prejudice.
The Growing Importance of On-Chain Risk Management in DeFi
DeFi has attracted considerable attention recently, but this has come with increased risk management challenges in these platforms. The conventional financial systems, for example, have employed innovative risk management systems for bet/hedging risks and other risks common in the market. However, in the decentralized world, such systems, as a rule, are absent or do not meet people’s needs.
For example, Chaos Labs has appeared as a key strategist in on-chain risk management at a point where the DeFi ecosystem is rising to its exponent. For this reason, the tools offered by Chaos Labs are instrumental in supporting the long-term stability of DeFi ecosystems, as they can prevent the kind of system issues that would threaten the industry’s viability.
Also, there is a great trend that institutional investors will invest in the DeFi project, and it is necessary to solve such risks which are offered by Chaos Labs. Real-time risk assessment and several critical updates are expected to be the new norms for DeFi protocols nominated for attracting institutional investments.
A Quick Wrap Up
According to the firm’s latest funding exploits, Chaos Labs’ $55 million Series A program is proof that decentralized finance clearly needs on-chain risk management solutions. Leveraging the support of premier VC funds and industry veterans, Chaos Labs is ready to grow its offering and prolong its work on strengthening and making DeFi safer. Since the need for such services grows, Chaos Labs will be even more involved in the formation of the decentralized finance industry’s further development as an innovative and secure sphere.
