Chaos Labs, a New York-based cloud platform that safeguards blockchains and protocols, has secured $20 million in a seed funding round. The investment was led by Galaxy, an investment management company, and PayPal, a global payments firm. Chaos Labs plans to use the investment to broaden its product selection and develop a full range of risk and security products.
Chaos Labs developed an automated risk management platform that shields crypto protocols from external vulnerabilities and dangers. The platform provides agent- and scenario-based simulations to defend protocols against economic vulnerabilities and market manipulation events.
In its first year, Chaos Labs collaborated with several significant DeFi (Decentralized Finance) companies, including Aave, Uniswap, BENQI, and Osmosis. The collaborations aimed to protect and enhance the protocols against manipulation and black swan market events and to provide capital optimization guidelines.
Six angel investors and 23 organizations participated in the investment round including some major players in the industry such as Avalanche, Polygon, OpenSea UniSwap, Coinbase Ventures, and Balaji Srinivasan.
Chaos Labs’ CEO and Founder, Omer Goldberg, stated:
“As the world moves from the opacities of traditional finance to a more open DeFi system, financial risk management must advance accordingly.”
According to Goldberg, Chaos Lab believes that every DeFi protocol needs to routinely carry out a rigorous risk assessment to confirm and validate that their economic system is safe from hackers and unexpected volatility.
Goldberg also noted that they had assembled a team of highly qualified security and infrastructure experts to facilitate their mission to implement top-notch security and risk management techniques while simulating countless economic scenarios on-chain.
Mike Giampapa, the general partner at Galaxy Ventures, stated:
“The success of crypto depends upon on-chain risk management and mitigation, and Chaos Labs is the type of software-solution the industry needs.”
As more assets go onto the blockchain, Giampapa believes Chaos Labs is essential to developing best practices for protocol security. He expressed delight with what they have achieved in their first year and their commitment to promoting economic stability and safety in the industry.
Paypal is one of the payment heavyweights chasing bets in the cryptocurrency industry. Paypal Ventures, the payment giant’s venture capital arm, was one of the investors in Aptos Labs’ $200 million funding round in March 2022.
According to the annual report submitted to the US Securities and Exchange Commission (SEC) on February 10, PayPal had a total of $604 million in various cryptocurrencies as of December 31. These included Bitcoin (BTC), Ether (ETH), Litecoin (LTC), and Bitcoin Cash (BCH).
PayPal’s cryptocurrency assets represent 67% of the company’s total financial liabilities of $902 million as of December 31 2022. The company’s total financial assets exceed $25 billion.
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