Kraken In Advanced Talks To Acquire 15% Stake In DeFi Lender Aave At $385 Million

Kraken is in talks to acquire a 15% stake in the DeFi lending protocol Aave at a $385 million valuation, according to three people with knowledge of the matter.

“Kraken, the crypto exchange part of Payward Inc”

@coindesk

CoinDesk reports the potential deal would see Kraken invest 35,000 ether (ETH) in return for 250,000 AAVE tokens and a 15% common equity stake in Aave Group, with two sources saying it is worth around $71 million.

@coindesk

CoinDesk also says the investment would be the first in a series of deals aimed at building out Payward Asset Management, with a Kraken spokesperson declining to comment and Aave not responding to a request for comment by publication time.

The talks arrive as Aave is recovering from a major DeFi crisis in April, when attackers tied to North Korea's Lazarus Group exploited KelpDAO's cross-chain bridge to mint roughly $292 million of unbacked rsETH and deposit the tokens as collateral on Aave.

CoinDesk adds that the exploit left Aave with an estimated $190 million to $230 million in bad debt and triggered more than $8 billion in withdrawals.

The reported structure of the Kraken-Aave deal—35,000 ETH for 250,000 AAVE tokens and a 15% common equity stake—was described by CoinDesk as coming from a document seen by the outlet.

In response to the report, Aave founder Stani Kulechov disputed a claim that the team would sell AAVE at a “70% discount,” writing, "First off, there is NO WAY we'd sell AAVE at a 70% discount lol".

Bitcoin World

The Defiant also says Kulechov argued that all Aave protocol and GHO stablecoin revenue flows to the AAVE token under the "Aave Will Win" proposal, and that "everyone at Aave Labs and Aave DAO works for $AAVE."

CoinDesk, meanwhile, reports that a third source familiar with the company's plans said the investment would be aimed at building out Payward Asset Management and that the firm has the capital to backstop the effort and partners around the table that want to fund these types of opportunities.

CoinDesk further notes that Kraken is also looking to syndicate the deal, which two sources with knowledge of the transaction said is worth around $71 million.

CoinDesk frames the Aave stake as part of Payward’s broader push beyond spot crypto trading, saying Kraken has stepped up acquisitions as Payward prepares for a potential public listing.

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CoinDesk reports that in April, Payward agreed to acquire crypto derivatives exchange Bitnomial for up to $550 million, adding a full suite of U.S. CFTC licenses covering brokerage, clearing and exchange operations.

The Defiant adds that Kulechov said Aave will host its quarterly community call in the coming weeks, where the team plans to share updates on its roadmap.

For Aave, the stakes are tied to the aftermath of the April exploit, when CoinDesk says the protocol’s smart contracts were never compromised but the exploit triggered more than $8 billion in withdrawals as users rushed to reduce their exposure.

CoinDesk concludes that the contagion risks of DeFi’s interconnected ecosystem were highlighted by the episode, leaving Aave with an estimated $190 million to $230 million in bad debt when the collateral became worthless.