Chaos Labs has announced the termination of its risk management partnership with Aave, citing fundamental disagreements on risk management approaches. This decision comes as Aave transitions to its V4 architecture, expanding its institutional reach. Chaos Labs, which has managed risk for Aave's V2 and V3 markets since November 2022, emphasized that the decision was not due to budget issues but rather a misalignment in risk management philosophies. During their partnership, Aave's total value locked grew from $5.2 billion to over $26 billion, with cumulative deposits exceeding $2.5 trillion. Despite a $5 million budget increase offer from Aave, Chaos Labs chose to exit, highlighting increased operational risks and the need for a more substantial risk management budget. The departure underscores the growing complexity and cost of risk management in DeFi as protocols like Aave evolve to meet higher compliance standards and institutional demands.