Chaos Labs, a $55 million-funded on-chain risk management firm: Founder is an Israeli special forces veteran who designed anti-Sybil mechanisms for LayerZero
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Chaos Labs, a $55 million-funded on-chain risk management firm: Founder is an Israeli special forces veteran who designed anti-Sybil mechanisms for LayerZero
The $55 million amount makes Chaos Labs one of the best-funded startups in the recent crypto space.
Navigating Web3 tides with focused insightsBy Frank, PANews
Chaos Labs, a New York-based crypto startup focused on on-chain risk management tools, has recently announced the completion of a $55 million Series A funding round. This substantial amount makes Chaos Labs one of the best-funded crypto startups in recent times, yet the company—despite strong backing from top investors—remains relatively unknown to the public and shrouded in mystery.
The latest round was led by Haun Ventures, with participation from prominent investment firms including F-Prime Capital, Slow Ventures, Spartan Capital, as well as major investors such as Lightspeed Venture Partners, Galaxy Ventures, and PayPal Ventures. The company also received support from angel investors including Solana's Anatoly Yakovenko and Phantom's Francesco Agosti. Notably, Haun Ventures, founded by former a16z general partner Katie Haun, previously backed projects like OpenSea, Zora, and Aptos Labs.
In 2023, Chaos Labs raised a $20 million seed round co-led by PayPal Ventures and Galaxy Digital. To date, the company has secured a total of $75 million in funding.
Founder from Special Forces, Early Team Comprised of Comrades-in-Arms
Omer Goldberg has an impressive background. He served in Israel’s special forces between 2009 and 2012, working as a combat soldier in the reconnaissance unit of the "Nahal" brigade. After graduating with a bachelor's degree in Information Systems Engineering from the Technion – Israel Institute of Technology in 2015, Goldberg independently developed a dark web analytics engine, building full-stack web applications and dark web crawlers to discover, analyze, and categorize potentially dangerous documents online. He also assisted Paris police in gathering field intelligence on domestic threats.
Goldberg later worked as an engineer at companies including Facebook and Instagram before fully dedicating himself to entrepreneurship in July 2021.
After securing the Series A funding, Omer Goldberg shared the founding journey of Chaos Labs on Twitter.
Ten years ago, Goldberg began mining Bitcoin in his dorm room, which introduced him to the crypto space. His first venture involved creating altcoin portfolios optimized for maximum returns and minimum risk through LP configuration, leading him to build a scalable cloud-based agent-driven Monte Carlo simulation system for blockchain analysis.
Later, when MakerDAO needed infrastructure simulation testing, Goldberg recognized a commercial opportunity. He then developed a cloud developer platform running agent-based Monte Carlo simulations, offering it as a SaaS service that quickly generated millions in revenue.
In 2021, Goldberg officially launched Chaos Labs with a founding team of nearly 25 employees—most of whom were friends from his time serving in the Israeli military.
In an interview with Fortune, Goldberg stated: “Chaos Labs’ software can ‘100%’ prevent Eisenberg attacks” (a term referring to a market manipulation attack in the crypto space, named after Avraham Eisenberg’s October 2022 exploit of Mango Markets).
PayPal Ventures, an investor in Chaos Labs’ seed round, said in a statement: “As crypto development accelerates and the environment grows increasingly complex, the scope of potential vulnerabilities and hacking incidents continues to expand.” Amman Bhasin, Partner at PayPal Ventures, added: “Chaos Labs addresses this challenge by providing protocols, investors, and users with a suite of risk management and optimization tools.”
Initially, Chaos Labs primarily offered “chaos engineering”—stress-testing DeFi protocols under worst-case scenarios. As the security landscape in crypto has grown more complex, the company has expanded its offerings to include risk management frameworks, risk oracles, analytics tools, incentive optimization, and Sybil detection.
Helped LayerZero Filter Out 800K Sybil Addresses, Serving Top DeFi Projects
Chaos Labs gained broader community attention earlier this year in May, when it led the anti-Sybil mechanism design and screening process for LayerZero—the largest such initiative to date—identifying over 800,000 Sybil addresses. Additionally, well-known DeFi projects such as Aave, GMX, Arbitrum, dYdX, and Jupiter are all clients of Chaos Labs. The firm has designed Jupiter’s risk platform, dYdX’s ecosystem reward mechanism, and Aave’s risk parameter adjustment framework.
Prior to receiving institutional investment, Chaos Labs had already received multiple grants from Chainlink, Uniswap, dYdX, and AAVE, primarily for conducting isolation testing and delivering high-impact proposals. These included submitting a “risk parameter adjustment” proposal within the Aave community, designing the incentive plan for dYdX Chain, and developing a risk management solution for Uniswap V3.
Today, security incidents in the crypto space have reached an alarming scale. According to Beosin Alert, a blockchain security auditing firm, losses from various security events in July 2024 surged significantly compared to June. Over 20 notable security incidents occurred in July 2024, resulting in total losses of $286 million due to hacks, phishing scams, and rug pulls—a 56.3% increase from June. Of these, attack-related losses totaled approximately $271 million, up 92.2% month-on-month. The largest single incident involved Indian exchange WazirX, which lost around $230 million—accounting for 85% of all attack losses that month. The second-largest was LI.FI, which lost about $11.6 million due to a smart contract vulnerability.
Against this backdrop, Chaos Labs has seen significant growth in demand. According to the company, “Over the past year, Chaos Labs has tripled its customer base, with more than 20 protocols—including Aave, GMX, and Jupiter—relying on its technology to secure, monitor, and scale their products. To date, Chaos Labs’ technology has secured $860 billion in cumulative transaction volume, $25 billion in loans, and $35 million in rewards.”
Looking ahead, as the DeFi sector continues to evolve and protocols face increasingly complex security risks, companies like Chaos Labs—providing essential infrastructure tools—appear to hold even greater commercial potential.
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