Cripto: Aave loses a key pillar as V4 reignites internal tensions

The decentralized lending protocol Aave is going through a turbulent period. Its main risk manager, Chaos Labs, has just slammed the door after three years of collaboration, and the reason goes far beyond a simple financial dispute.

The departure of Chaos Labs complicates the launch of Aave V4

On the Aave governance forum, a message exploded like a bomb: Chaos Labs officially announces its departure. The company, which managed the protocol’s risks since 2022, cites a “fundamental disagreement” over how risks should be managed in the new V4 system. A clear break, after more than three years of collaboration.

Chaos Labs’ record within Aave is nevertheless eloquent. Under its supervision, the protocol’s total value locked (TVL) rose from 5.2 billion to more than 26 billion dollars. 

Users borrowed more than 2.5 trillion dollars, and liquidations exceeded 2 billion, without causing any major loss. The team even designed in-house tools, like risk oracles, to strengthen the protocol’s reliability against DeFi competition.

So why leave now? The answer comes down to three concrete problems:

• An underfunded budget. Aave offered Chaos Labs 5 million dollars. The team requested 8, estimating that this amount alone would allow managing both V3 and V4 simultaneously while ensuring institutional expansion. Result: Chaos Labs has been working at a loss for three years.
• A doubled workload. The migration from V3 to V4 requires maintaining both systems in parallel for months, even years. A colossal effort for an already stretched team.
• A worrying legal vacuum. Without clear legal protections, DeFi risk managers remain personally exposed in case of errors. For Chaos Labs, this is a red line.

Aave’s founder, Stani Kulechov, thanked the team via social networks while contesting some claims. He assured that the deployment of V4 would continue “in a controlled manner and prioritizing security.” 

Governance under pressure at a decisive moment

Chaos Labs departure does not come out of nowhere. It is part of a series of defections weakening the Aave ecosystem. BGD Labs had left the project citing an unbalanced organizational environment. 

The Aave-Chan Initiative (ACI) also ended its activities following disagreements over funding and governance rules. Each of these departures takes with it irreplaceable expertise.

Internal tensions are not new. The Aavenomics proposal, a 51 million dollar plan aiming notably to transform Aave Labs into a subsidiary controlled by the DAO, had barely been adopted a few weeks ago. A tight vote that highlighted deep divisions within the crypto community.

In this same tense context, the DAO nevertheless sent a strong signal for the protocol’s future. At the end of March 2026, with more than 645,000 favorable votes and virtually no opposing voices, it validated the deployment of V4 on the Ethereum mainnet. An almost unanimous consensus, which seemed then to heal wounds. The next step, the on-chain AIP vote, must still officially ratify the activation of the crypto protocol.

But it is precisely at this momentum that Chaos Labs’ departure complicates everything. The real question remains unanswered: who will manage Aave V4’s risks during this deployment? 

Aave finds itself at a critical crossroads. Institutional investors’ trust, which the protocol actively seeks to attract, will largely depend on its ability to fill this void quickly and seriously. Otherwise, V4 risks marking not a triumphant turning point, but the beginning of a long period of uncertainty.