Key Takeaways:
- Kraken is in talks to acquire a 15% stake in Aave at a $385 million valuation
- The deal involves 35,000 ETH for 250,000 AAVE tokens and equity in Aave Group
- The investment is part of Payward's push to diversify ahead of a potential IPO
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Kraken eyes 15% Aave stake at $385 million ahead of IPO
Kraken is in talks to acquire a 15% stake in Aave at a $385 million valuation, according to three people with knowledge of the matter.
"The investment would be the first in a series of deals aimed at building out Payward Asset Management, with the firm taking a more active role in DeFi and other investment opportunities," a person familiar with the company's plans said.
The deal would see Kraken investing 35,000 ether, worth about $71 million, in return for 250,000 AAVE tokens and a 15% common equity stake in Aave Group, according to a document seen by CoinDesk. Two sources said Kraken is also looking to syndicate the deal.
The proposed investment comes months after Aave weathered the fallout from the April KelpDAO exploit, which left the protocol with an estimated $190 million to $230 million in bad debt and triggered more than $8 billion in withdrawals. Kraken's parent company Payward has stepped up acquisitions as it prepares for a potential IPO, including the April agreement to acquire derivatives exchange Bitnomial for up to $550 million.
Aave is the largest decentralized lending protocol on Ethereum, allowing users to lend and borrow crypto assets without intermediaries. Depositors earn yield by supplying tokens to liquidity pools, while borrowers post crypto collateral to take out loans, with smart contracts managing the process automatically.
The protocol was thrust into the center of one of DeFi's biggest crises in April after attackers tied to North Korea's Lazarus Group exploited KelpDAO's cross-chain bridge to mint roughly $292 million of unbacked rsETH. The hackers deposited the tokens as collateral on Aave and borrowed real assets against them. Although Aave's own smart contracts were never compromised, the exploit triggered more than $8 billion in withdrawals as users rushed to reduce their exposure.
Payward, which was raising new capital at a $20 billion valuation in May according to CoinDesk, is targeting businesses that expand its regulated trading infrastructure. The Aave deal is part of the exchange's push beyond spot crypto trading as it builds a multi-asset platform ahead of a widely anticipated IPO.
AAVE rose 10.1% on the news, outperforming a broader crypto market where bitcoin fell to a new multi-year low of $58,000, according to CoinGecko data.
This article is for informational purposes only and does not constitute investment advice.
