PayPal Doubles Down on Blockchain With New Investment in On-Chain Risk Management Startup

Key Takeaways

• PayPal Ventures has invested in a range of crypto startups.
• In 2023, PayPal started using PYUSD for venture funding.
• Chaos Labs is the latest company to receive support from PayPal.

PayPal is no stranger to investing in crypto startups. The Web3 portfolio of its venture capital arm includes the layer-1 blockchain developer Aptos Labs, the crypto bank Anchorage Digital and the wallet provider Magic, to name just a few. 

In its latest investment, PayPal Ventures has thrown its weight behind Chaos Labs, participating in the on-chain risk management startup’s $55 million Series A round. 

PayPal Backs Chaos Labs

Founded in 2022, Chaos Labs provides security and risk management solutions for decentralized finance (DeFi) protocols. The startup counts major DeFi players among its clients, including Chainlink, Uniswap, Aave, Curve and dYdX.

In 2023, Chaos raised $20 million in seed funding. Galaxy and PayPal Ventures led the round, with additional participation from Coinbase, Uniswap, Lightspeed, Hashkey Capital and others.

Commenting on the recent Series A, PayPal Ventures Partner Amman Bhasin said  the decision to double down on investment in Chaos Labs “reflects our belief in their vision to create a safer crypto ecosystem and move more financial services on chain.”  

PYUSD Powers VC Investments

Starting with investment  in the crypto payments startup Mesh, since 2023, PayPal has moved to fund venture capital investments with its stablecoin, PYUSD.

Whereas Mesh received a mixture of stablecoins and fiat, Chaos will receive the total investment from PayPal in PYUSD. 

After PYUSD migrated from Ethereum (ETH) to Solana (SOL) in May, a transaction simulation was demonstrated on stage at the Solana Breakpoint conference in Singapore on Friday, Sept. 20.

DeFi Data for Risk Management

Chaos’ risk management solutions are intended to help Web3 developers monitor threats in real-time with on-chain data monitoring, analytics and live risk alerts.

The startup has built “Observability Dashboards” for protocols like Aave and Venus that let users explore the effect of asset price changes on the health and liquidation of wallets. The data portals also push live alerts of events that might cause market volatility, such as whale transactions and high wallet supply concentration.

About the Author

James Morales

Although his background is in crypto and FinTech news, these days, James likes to roam across CCN’s editorial breadth, focusing mostly on digital technology. Having always been fascinated by the latest innovations, he uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.

See more

[email protected] LinkedIn Twitter