Kraken Eyes 15% Aave Stake at $385 Million Valuation as DeFi Push Expands

TLDR

Kraken is in talks to acquire a 15% stake in Aave Group at a $385 million valuation, as the crypto exchange moves to expand its presence in decentralized finance through a proposed strategic investment.

The potential transaction would involve Kraken investing 35,000 ether in exchange for 250,000 AAVE tokens and a 15% common equity stake in Aave Group, according to details cited by people familiar with the matter. The deal is estimated to be worth about $71 million, with Kraken also exploring syndication for part of the investment.

Kraken, operated by Payward Inc., has not publicly confirmed the talks, and Aave had not issued a response at publication time. The discussions come as Kraken increases acquisition and investment activity while preparing for a potential public listing.

Kraken Expands Investment Strategy Through Payward

The proposed Aave investment is expected to be part of a broader strategy under Payward Asset Management, according to people familiar with Kraken’s plans. The initiative is designed to give the company a more active role in DeFi and other investment opportunities outside its core exchange business.

Kraken has already been expanding beyond spot crypto trading. In April, Payward agreed to acquire crypto derivatives exchange Bitnomial for up to $550 million, adding regulated U.S. derivatives infrastructure, including brokerage, clearing and exchange operations under CFTC oversight.

The company has also been linked to capital-raising efforts at a valuation of about $20 billion, as it builds a wider financial services platform before a possible IPO. A stake in Aave would move Kraken closer to on-chain lending infrastructure, one of the largest areas of decentralized finance.

Aave is the largest DeFi lending protocol, allowing users to lend and borrow crypto assets without traditional intermediaries. Depositors supply tokens to liquidity pools and earn yield, while borrowers post collateral to access loans managed by smart contracts.

Aave Rebuilds After KelpDAO Fallout

Aave has been rebuilding after a major April crisis tied to KelpDAO’s rsETH cross-chain bridge. Attackers linked to North Korea’s Lazarus Group reportedly minted about $292 million of unbacked rsETH and used the tokens as collateral across DeFi platforms, including Aave.

The incident left Aave facing an estimated $190 million to $230 million in bad debt after the collateral became worthless. Aave’s own smart contracts were not hacked, but the episode triggered large withdrawals as users reduced exposure to interconnected DeFi risks.

More than $8 billion reportedly left the protocol during the withdrawal wave, pressuring deposits and loan activity. The event raised attention around collateral standards, bridge risk and the way problems in one protocol can affect lending markets across DeFi.

Aave founder Stani Kulechov later said the protocol was working on a new risk framework, pending governance review. Market participants have been watching whether improved controls can help restore deposits and support institutional confidence in the lending platform.

Standard Chartered Sees Long-Term Aave Growth

The Kraken talks follow a bullish Standard Chartered report on Aave. The bank recently initiated coverage with a $3,500 price target by the end of 2030, saying the protocol could benefit from renewed DeFi growth and tokenized real-world asset adoption.

Standard Chartered’s digital assets research head Geoff Kendrick said Aave is positioned to capture lending demand as tokenized assets move on-chain. The bank expects assets actively used in DeFi to rise sharply by 2030, creating more potential demand for lending protocols.

Aave’s Horizon platform is viewed as one possible growth driver. Horizon is designed for permissioned lending markets backed by tokenized real-world assets, to attract institutions that require compliance-focused access to on-chain finance.

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