RiskLayer Secures Funding to Enhance DeFi Security with AVS Technology

• RiskLayer raises undisclosed funds in a pre-seed round to develop DeFi security middleware on EigenLayer.
• RiskLayer’s AVSs, Risk Oracle and Risk Rollup aim to enhance DeFi risk data and secure application-specific rollups.
• Chainrisk Labs manages over $10B in assets, providing economic risk management to major DeFi protocols and ecosystems.

RiskLayer, a protocol by Chainrisk Labs, recently announced the completion of its pre-seed funding round. The project aims to build decentralized finance (DeFi) security middleware on EigenLayer. Co-led by Antler and Momentum6, the “Builders Round” saw participation from Wagmi Ventures, Hypotenuse Ventures, and several angel investors. The exact amount raised was not disclosed.

RiskLayer proposes developing two Actively Validated Services (AVS) to address DeFi economic security concerns. The first, Risk Oracle AVS, aims to provide DeFi risk data using a “proof of risk” consensus. The second, Risk Rollup AVS, focuses on economically securing application-specific rollups created on RiskLayer.

Chainrisk Labs, developers behind RiskLayer, report managing over $10 billion in assets. They have provided economic risk management solutions for protocols like Compound, Angle Labs, Gyroscope, and Ebisu Finance, as well as ecosystems such as Arbitrum and Fuel Network.

Innovative Approach to DeFi Economic Security

CEO Sudipan Sinha shared that RiskLayer abstracts economic security from the protocol layer and scales it to the application layer. This approach aims to make risk-optimized strategies more accessible for both institutions and DeFi users. The project’s focus on economic security in DeFi addresses ongoing risks and vulnerabilities in the sector.

RiskLayer’s innovative approach involves deploying two distinct AVSs. The Risk Oracle AVS serves as a comprehensive data provider for DeFi risk. It uses a “proof of risk” consensus to index user risk across different markets and assets. This allows investors to deploy capital with optimized risk efficiency. Meanwhile, the Risk Rollup AVS secures application-specific rollups on RiskLayer. This fosters the development of new structured financial products that are inherently risk-aware.

Future Prospects and Industry Impact

The funding of projects like RiskLayer reflects ongoing efforts to address security concerns in DeFi. As these solutions develop, their impact on DeFi adoption and overall market stability will be closely watched. The newly secured funds will accelerate the development of RiskLayer’s AVS infrastructure and prepare for its upcoming pre-staking launch.

Nitin Sharma, Partner and Global Co-lead for Web3 at Antler expressed confidence in RiskLayer’s trajectory. He cited the team’s depth of research and thought leadership in economic security. Nilotpal Mukherjee, Founder of Symbiote and General Partner at Momentum6, praised the team’s focus on solving the multi-billion dollar problem in Web3 economic security.

RiskLayer’s approach to commercializing risk as a metric aims to provide more transparent risk assessments for DeFi protocols and users. As the project progresses, it may face challenges in balancing decentralization principles with centralized risk assessment services. However, its innovative solutions and strategic partnerships position it as a promising player in the DeFi security field.