[ARFC] - Chaos Labs Engagement Amendment


Chaos Labs proposes an amendment to our current scope of work and compensation structure accordingly. Chaos Labs is requesting a $400,000 increase, bringing our total annual compensation to $2M.


In November 2023, Chaos Labs’ engagement with Aave DAO was unanimously renewed, underscoring our ongoing commitment and the expanded scope of our engagement with Aave, which has evolved significantly with Aave’s expansion now across over 10 deployments.

This renewal was done during the bear market, prompting us to propose a community-friendly deal at a lower-than-market cost, given the challenging market conditions and being mindful of the broader economic environment. This was aligned with the feedback from major Aave stakeholders and delegates. However, the expansion of Aave to multiple chains, in addition to the increased volatility and activity across DeFi and crypto, has significantly increased our scope and workload, necessitating additional resources to maintain the high level of service required.

As dedicated risk contributors, Chaos Labs adopts a holistic approach to managing the spectrum of responsibilities within Aave’s ecosystem, including V3, GHO, and the continued offboarding of V2. Our commitment encompasses risk management, data science, analytics, and parameter recommendation, among other critical functions. An amendment to our compensation is essential to reflect better the resources committed, the depth of our engagement, and the substantial value we bring to the Aave community.

Considering improved market conditions and Aave’s growth over the past several months, we believe the DAO is now in a position to revise our compensation to more accurately reflect the current scale and impact of our engagement and allocated resources.

Enhancing Aave’s Risk Management Framework

The proposed compensation amendment is not merely a financial adjustment but a continued investment in our collaboration. With additional funding, Chaos Labs will be poised to:

  • Deploy Additional Resources: Enhance support for existing and future Aave markets, ensuring comprehensive risk management across all deployments.
  • Develop and Optimize Risk Oracles: Focus efforts on the continued development of the Chaos Risk Oracle specifically for Aave’s needs, enabling more efficient and dynamic risk parameter adjustments. This will further streamline the risk management process, reducing the need for manual interventions and significantly boosting the protocol’s operational efficiency and security.
  • Expansion of Risk Monitoring and Alerts: Our real-time monitoring and alert services are delivered via the Chaos Labs Risk Monitoring Platform. We’re committed to enriching these services with more comprehensive analytics and alerts, enhancing visibility and enabling users to meticulously evaluate ecosystem risks and the health of the protocol through intuitive dashboards and data visualizations. The deployment of Risk Oracles will introduce additional data, providing the community with an improved grasp of risk levels and updates to protocol parameters.

Collaborative Expansion with a Second Risk Service Provider

Following Gauntlet’s resignation as the second-risk service provider, we strongly support the idea of bringing on another service provider to complement our existing scope of work. As part of our engagement, we are committed to dedicating the required resources to assist with the onboarding process and ongoing collaborations, ensuring a seamless integration that enhances Aave’s risk management capabilities without duplicating efforts.


The requested compensation amendment is key for Chaos Labs to sustain and expand its support for Aave. It will enable us to allocate additional resources effectively, develop innovative solutions like the Risk Oracle, and continue our mission to enhance Aave’s security and efficiency. We are committed to our partnership with Aave and believe that with the community’s support, we can continue setting the standards for risk management in the industry.


We request an additional $400K for the remainder of our current engagement, bringing the total annual compensation to $2M.

If this proposal is approved, a stream of the allocated budget will be activated, with a Chaos Labs-controlled account (0xbC540e0729B732fb14afA240aA5A047aE9ba7dF0) as the recipient.

In terms of technical implementation, the AIP will call the createStream() method of the IAaveEcosystemReserveController interface to create a stream of 400,000 aUSDC or GHO.


Chaos Labs provides ongoing risk management services to several other borrowing/lending protocols, such as Benqi, Venus, Tapioca, and more. These commitments do not interfere with our responsibilities concerning our association with Aave. We conscientiously provide explicit disclaimers and relevant context in any proposals that may influence clientele across the DeFi ecosystem.

This proposal was not commissioned or paid for by any third party.

Next steps

  1. Following community feedback, we are targeting a Snapshot vote on April 15th.
  2. If consensus is reached, submit an Aave Improvement Proposal (AIP).


Copyright and related rights waived via CC0.


I just want to make a quick comment on this one. First of all I support Chaos and I think the 400k they are asking is more than fair. They listened to the DAO back then and accepted 1.6m although they basically did all the work back then when there should have been two active risk service provider. The last few months the team was the only risk provider but still all the time available. Given the speed, work quality and engagement they are showing to the DAO it’s reasonable to support them and I do hope we will work together for a long time.


We have published a Snapshot for the community to vote on, starting in 24h.

We thank you in advance for your participation in the vote.


Just want to drop a comment in here - Chaos Labs is a fantastic team and have been a pleasure to collaborate with. The 400k addition seems reasonable given that they are the only risk providers to the DAO at the moment, and given the quality of their analysis.


with the ACI, we’re supportive of this amendment, the DAO worked a lot to increase the protocol sustainable and can afford this budget bump while maintaining large net profits.


We are supportive of this proposal and thank @ChaosLabs for there continued commitment to the Aave DAO. The requested 400,000 is reasonable and we would like to express a preference for this to be nominated in GHO.


Just to clarify, given that GHO almost never trades at 1 USD (generally anywhere from 50-80bps discount per your dashboard), if service provider compensation is to be paid in GHO does this mean @ChaosLabs would

  • get paid 400.000 GHO
  • or do they get paid (400.000 + x) GHO? where 400.000 + x is the amount that can be swapped for something that is in fact 1:1 redeemable for USD?

If it is the former, I hope that compensation denominated in GHO takes this into account so that we are not effectively forcing our service providers to pay a 50+bps GHO tax. Perhaps this discount will improve given @TokenLogic and the GLC’s efforts here but it is a tax nonetheless on service providers’ earned compensation.
cc: @EzR3aL @MarcZeller @bgdlabs @eboado @Emilio

We support increasing Chaos Labs’ compensation due to the increased workload and the improved market conditions. Chaos Labs has been a valuable service provider to the Aave DAO and should be adequately compensated.


AIP-85 has been published for this proposal.

Thank you in advance for your participation in the vote.


It is 400,000 GHO, not $400,000 at market price.