On-chain risk management platform Chaos Labs has raised $20 million in a seed funding round co-led by PayPal Ventures and Galaxy Digital, the company said in a blog post on 21 February.
According to the announcement, Chaos Labs — which offers an automated economic security system for crypto protocols — will use the newly raised funds to build out and expand its suite of risk and security products for decentralized finance (DeFi) protocols. The seed funding round saw participation from a number of angel investors and 23 organizations, including Coinbase Ventures, Polygon, Avalanche, OpenSea, Uniswap, and others. Chaos Labs founder and CEO, Omer Goldber, said in a statement:
“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 company offers DeFi protocols an on-chain risk management platform with customized automated security monitoring with threat prevention, and a simulation engine that allows projects to verify the health and stability of their protocols regardless of market conditions. Chaos Labs’ risk suite can help protect protocols through optimized risk and capital efficiency, streamlined risk assessments, and spending optimizations.
Founded in 2021, the company has attracted some of the biggest names in DeFi, and has already formed partnerships with Aave, Chainlink, Uniswap, BENQI, and Osmosis. PayPal’s interest in the company may come from the fact that the payments giant is holding a significant part of its financial liabilities in crypto offered to its customers. PayPal’s 2022 annual report filed with the U.S. Securities and Exchange Commission revealed that the company held a total of $604 million in various crypto assets at the end of the year, the majority of which were in Bitcoin and Ether.