Payments giant PayPal and investment management firm Galaxy have joined hands to raise $20 million in seed funding for Chaos Labs, a New York-based cloud platform for blockchain and protocol security.
With an automated risk management platform, Chaos Labs protects crypto protocols from external abuse and risks. The platform does this by offering agent-based simulations and scenarios that help secure protocols against economic vulnerabilities and market manipulation events.
The goal of the seed funding is to help Chaos Labs further automate on-chain risk optimization.
1/ We are pleased to announce that we have secured $20 million in seed funding @galaxyhq and @PayPal to automate risk optimization in the chain! pic.twitter.com/gVnarbmFSk
— omer (@omeragoldberg) February 21, 2023
23 organizations and six angel investors participated in the financing round. Prominent names include Coinbase Ventures, Polygon, Avalanche, OpenSea UniSwap and Balaji Srinivasan.
According to Chaos Labs founder and CEO Omer Goldberg, financial risk management must be upgraded to accommodate decentralized finance (DeFi) ecosystems. Added by:
“We believe that every DeFi protocol must regularly perform robust risk testing to verify and confirm that its economic system is secure against hackers and unexpected volatility.”
The official website states that the Chaos Labs risk suite can help protect DeFi protocols through optimized risk and capital efficiency, effective risk assessment, and effective risk assessment.
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PayPal’s interest in the crypto ecosystem was highlighted when the company was found to hold a significant portion of its financial liabilities in cryptocurrencies offered to its customers.
As reported by Cointelegraph, by the end of 2022 PayPal held a total of $604 million in various cryptocurrencies, including Bitcoin (BTC), ether (ETH), Litecoin (LTC) and Bitcoin Cash (BCH). The information was found in an annual report filed with the United States Securities and Exchange Commission on February 10.
Bitcoin represents $291 million in the firm’s asset breakdown, with $250 million in ETH. The remaining $63 million includes Litecoin and Bitcoin Cash combined.
