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 securing blockchains and protocols.
Chaos Labs protects crypto protocols against exploitation and external risks with an automated risk management platform. The platform does this by offering agent- and scenario-based simulations, which also help secure protocols against economic vulnerabilities and market manipulation events.
The seed funding is intended to help Chaos Labs further automate on-chain risk optimization.
1/ We are pleased to announce that we have secured $20M in seed funding led by @galaxyhq and @PayPal to automate on-chain risk optimization! pic.twitter.com/gVnarbmFSk
— omer (@omeragoldberg) February 21, 2023
The funding round included 23 organizations and six angel investors. Notable names among them are Coinbase Ventures, Polygon, Avalanche, OpenSea UniSwap and Balaji Srinivasan.
According to CEO and Founder of Chaos Labs, Omer Goldberg, there is a need to upgrade financial risk management for the decentralized finance (DeFi) ecosystem. He added:
“We believe that every DeFi protocol should regularly conduct robust risk tests to verify and validate that the economic system is secure against hackers and unwanted volatility.”
The official website states that the Chaos Labs risk package can help protect DeFi protocols through optimized risk and capital efficiency, simplified risk assessment and efficient risk assessment.
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PayPal’s interest in the crypto ecosystem was highlighted when it was found to hold a significant portion of the financial obligations in cryptocurrencies offered to its customers.
As Cointelegraph reported, 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 the annual report filed with the United States Securities and Exchange Commission on February 10.
Out of the lot, Bitcoin accounts for $291 million in real estate breakdown, while $250 million is held in ETH. The remaining $63 million consists of Litecoin and Bitcoin Cash combined.