Chaos Labs, a startup offering automated economic security solutions for decentralized finance (DeFi) protocols, has secured $20 million in a seed funding round. The funding was co-led by Galaxy Digital and PayPal Ventures and is aimed at expanding the suite of risk and security products for DeFi protocols.

According to a recent Chainalysis report, last year saw a record-breaking $3.8 billion in crypto assets stolen by hackers, with the majority of the thefts coming from DeFi protocols. The funding raised by Chaos Labs is therefore a welcome development for the DeFi community, which has been grappling with security challenges.

Founded in October 2021, Chaos Labs provides an automated, on-chain risk management platform that helps DeFi protocols protect user funds from attacks while optimizing capital efficiency. The platform offers customized automated security monitoring with threat prevention and a simulation engine that verifies the protocol’s health and stability under different market conditions.

The startup has already partnered with leading DeFi players, including Aave, Chainlink, and Uniswap, to provide cutting-edge security solutions. With the fresh funding, Chaos Labs plans to further develop its suite of products and expand its reach across the DeFi ecosystem.

“At Chaos Labs, we believe that every DeFi protocol must regularly conduct robust risk testing to verify and validate that their economic system is secure against hackers and unanticipated volatility,” said Omer Goldberg, founder and CEO of Chaos Labs.

Other investors in the funding round include Hashkey, Coinbase, Uniswap, Lightspeed, Bessemer, and a number of angel investors. The support of these industry leaders is a testament to the potential of Chaos Labs’ solutions to revolutionize DeFi security.