Doge Trader

We respect the decision of Chaos Labs to step down as one of the two risk managers for the Aave DAO. We want to thank Chaos Labs for their work over the years. They have been a valuable partner to the Aave DAO, and their contributions have helped Aave grow and mature. There is no disruption to the Aave Protocol, its smart contracts, asset listings, or network deployments, and we will work closely with Chaos Labs during the offboarding process. Aave operates with a two-layer economic risk model that has been managed by Chaos Labs and LlamaRisk. While this model does create tension between risk managers from time to time, we believe it has been valuable in safeguarding Aave. We strongly support maintaining a two-layer approach and will continue supporting this model, alongside an additional technical risk layer managed by Aave Labs. Over the past weeks, we held discussions with the Chaos team regarding next steps, as Chaos was exploring winding down its risk consultancy services business (and had already begun winding down some agreements with other protocols). We were generally supportive of a 2× increase in their risk management payment to $5M, but not supportive of $8M without a separate addendum at a later stage if the workload proved higher than anticipated. What we did not support were other elements of the proposal, including setting Chaos Labs as the sole risk manager and using Chaos Labs price oracles instead of Chainlink on all new deployments, as well as adopting Chaos Labs vaults as the default vaults (which are not yet audited) for all B2B integrations. While we do not see issues with these Chaos products or their future viability, we strongly believe that, given the scale of the Aave protocol, it should maintain at least a two-layer risk management model and vendor lock-in free vaults. Additionally, given the strong track record with Chainlink, we prefer to continue supporting Chainlink for price oracles, which our users are currently more comfortable with at scale. Regarding Aave V4, the architecture introduces isolated risk markets through Spokes, new liquidation logic, and governance-controlled parameters that give the DAO more granular control over how it manages risk across different markets and assets. We held multiple risk calls with Chaos Labs employees in attendance well before V4 went live, and the feedback we received during those sessions does not align with the concerns expressed in their post. For the immediate future, Aave Labs will work closely with LlamaRisk to ensure a smooth transition and uninterrupted risk coverage for the protocol. LlamaRisk already serves as a risk contributor to the Aave DAO and has deep familiarity with the protocol’s architecture and parameters. We support LlamaRisk increasing their budget to accommodate this additional workload and expanding their team as needed. Aave Labs will also contribute engineering and analytical resources wherever necessary to support this transition. We also want to thank the entire Chaos Labs team for their contributions over the years, as they have helped bring the protocol we built into its current level of maturity.