Chaos Labs exits the Aave ecosystem, citing fundamental disagreements over risk management philosophy

BlockBeatNews · 2026-04-06T16:51:17+00:00

Chaos Labs announced the end of their contributions to the Aave ecosystem due to factors such as core team attrition leading to increased risk, Aave V4 adding operational burdens, and long-term losses. The team believes the current situation is unacceptable and has decided to withdraw.

BlockBeatNews

2026-04-06 16:51:17

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BlockBeats message, April 7, Chaos Labs posted to announce that it will end its role as a core contributor in the Aave ecosystem for the past three years. The team said that the two parties have fundamental disagreements over their “risk management approach,” and as the protocol evolves, this disagreement continues to grow. Chaos Labs cited three main reasons:

· The loss of core contributors has led to a significant increase in operational pressure and risk
· Aave V4 expands the scope of risk management while also increasing operational and legal burdens
· Long-term participation remains unprofitable; even if the budget is increased, it is still difficult to achieve profitability

The team said that under the current path, either lowering execution standards or continuing to incur losses—both are unacceptable—so it chose to exit.

BlockBeats previously reported that on March 3, the Aave protocol’s core governance team, Aave Chan Initiative (ACI), announced that it would shut down operations and exit AAVE. On February 20, BGD Labs, the development team of the Aave V3 codebase, announced it would exit.

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