Chaos Labs / Venus - Renewal 2025-2026

Summary

Chaos Labs proposes to renew its engagement with Venus Protocol for a 12-month term, expanding on the foundational risk management work of the past 2 years and ushering in a more intelligent, responsive future for Venus. The cornerstone of this renewal is the continued rollout and integration of Chaos Labs’ Risk Oracle infrastructure, enabling automated, real-time updates to market risk parameters—a major advancement toward protocol adaptability and capital efficiency.

In parallel, Chaos Labs will continue to provide the community with rigorous simulation-based parameter optimization, real-time monitoring and alerting, incident response, and support for asset listings and isolated market launches, currently supporting over 160 assets across 20 isolated markets. Together, these services will ensure Venus remains not only safe, but agile, competitive, and sustainable as it scales.

Strategic Rationale

Over the past 24 months, Chaos Labs has served as Venus’ comprehensive risk engine, delivering end-to-end coverage across core protocol parameters, market onboarding, real-time monitoring, incident response, and simulation-based optimization. This wide-ranging support has become a critical layer of defense and decision-making infrastructure, safeguarding protocol health while enabling responsible growth.

Manual VIP-based parameter updates—though aligned with Venus’ governance-first philosophy—are inherently limited in pace and responsiveness. To address this, Chaos Labs designed and deployed the Risk Oracle architecture, a novel framework that brings real-time, simulation-informed parameter recommendations on-chain. Already live for borrow and supply caps, this system allows Venus to automatically adapt to current usage patterns and risk exposure, without compromising decentralization or safety.

The Risk Oracle is a paradigm shift: from reactive to proactive, from manual to autonomous. With bounded logic, on-chain validation, and secure execution via a Keeper, it ensures that key risk parameters reflect current market realities—not trailing conditions. This is especially critical in volatile environments, where hours can matter and capital efficiency must be finely balanced against systemic safety.

The proposed renewal will extend this infrastructure, allowing Venus to evolve into a self-regulating protocol—where parameters such as interest rates, liquidation thresholds, and collateral factors can be tuned dynamically through transparent, auditable, and data-driven automation. Paired with our continued support across simulations, monitoring, and onboarding, Chaos Labs ensures Venus remains not only one of the safest protocols in DeFi, but also one of the most agile and forward-looking.

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Scope of Work

1. Expansion of Risk Oracle Automation

Chaos Labs proposes deepening the integration and utility of the Risk Oracle system as a foundation for autonomous, real-time risk parameterization. Building on the initial implementation, which will deliver bounded updates to borrow and supply caps, we will enhance the Oracle’s capabilities to support broader categories of dynamic risk adjustments.

Our goal is to enable the Venus protocol to respond to evolving market conditions in real time, governed by simulation-informed logic and executed within community-approved safeguards. This evolution supports a more adaptive protocol posture, where risk settings continuously align with usage patterns, volatility regimes, and system health, without awaiting manual intervention.

A newly developed public Risk Oracle Dashboard will accompany this effort, offering:

• Historical and live views of Oracle-driven parameter values
• Simulation context and rationale for updates
• Insights into downstream impact on utilization, capital efficiency, and liquidation risk

This framework paves the way for autonomous parameterization across multiple domains, with all changes transparently validated on-chain and surfaced to the community, enhancing Venus’ resilience, agility, and efficiency in a rapidly evolving DeFi landscape.

2. Simulation-Based Parameter Optimization

Chaos Labs will continue to run routine and on-demand simulations to evaluate optimal settings for:

• Collateral Factors
• Liquidation Incentives and Thresholds
• Supply and Borrow Caps
• Reserve Factors
• Interest Rate Curve Designs

Each recommendation includes detailed modeling of user behavior, Value at Risk under various tail events, and tradeoffs between protocol revenue, usage, and liquidation risk.

3. Monitoring, Alerting & Analytics

We will maintain and continue to improve the Venus Risk Monitoring Platform. Key features include:

• Real-time tracking of utilization, liquidity depth, asset correlation, and wallet concentration
• Alerts for threshold breaches or emerging risk vectors (e.g., large-position migrations, liquidation clustering)
• Metrics to support contributors and delegates in understanding protocol health

4. Incident Response and Emergency Triage

In the event of unforeseen market disruptions, Chaos Labs will:

• Rapidly assess risk impact through simulations and data forensics
• Recommend emergency parameter updates or freeze actions if necessary
• Coordinate with community members, developers, and signers during critical response windows

This real-time coverage has proven critical during prior market stress scenarios and will continue to be a core pillar of our support.

5. New Asset & Market Onboarding

As Venus continues to grow, Chaos Labs will provide full-spectrum onboarding risk analysis for:

• Newly listed collateral and borrowable assets
• Isolated market design and parameterization
• Strategic asset grouping and caps
• Governance and community-facing onboarding packages

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Community Collaboration & Governance

We will continue to provide:

• Public updates covering simulations, Oracle output, risk alerts, and future priorities
• Governance forum engagement with context, rationale, and simulation analysis
• Direct communication with contributors and delegates to align risk priorities and respond to feedback
• Proposal authorship and support in drafting risk-related VIPs

Our commitment remains one of transparency, precision, and accessibility.

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Next Steps

As we plan for the next phase of our collaboration, it is critical that pricing reflects the true scope of the services being provided. We look forward to realigning commercial terms to ensure ongoing partnership sustainability and continued high-quality support across all active deployments.

Based on recent feedback from the Venus team, Chaos Labs will be narrowing the scope of support to focus exclusively on the BNB Chain deployment. This strategic reduction allows Chaos Labs to dedicate concentrated resources toward optimizing and securing the core Venus deployment on BNB, while pausing support for additional deployments (e.g., Arbitrum, Ethereum, Base, etc.) at this time.

Renewal Commercial Terms

• Duration: 12-month engagement
  • August 1st, 2025 to July 31st, 2026
• Scope:
  • BNB - base deployment package

Scope	Annual List Price	Discount %	Annual Cost
BNB Chain	$1,000,000	60%	$400,000

• Annual Fee: $400,000 USD
  • Paid via token (Binance Peg USDC); sent to a Chaos Labs-controlled wallet
    • 0xb98D807cDD58a35d2Fca300bEBC06ac39A7CE038
  • Payment timeline:

Full Term Billing Schedule Summary	# Quarters	USDC on BNB Chain
Quarter 1 (Pro-Rated): August 1, 2025 – September 30, 2025	0.67	66,667
Quarters 2 – 4: October 1, 2025 to June 30, 2026	3	100,000
Quarter 5 (Pro-Rated): July 1, 2026 – July 31, 2026	0.33	33,333
Total	4	400,000

• Not In Scope
  • Coverage for the following historical deployment are not included in this renewal:
    • Arbitrum
    • Ethereum
    • Base
    • ZKsync
    • Unichain
  • Coverage for additional deployments beyond BNB chain will be billed at $120,000 (40% discount) USD annually and will be pro-rated co-term to this engagement.