CoinDesk
Crypto exchange Kraken, part of Payward Inc., is in talks to acquire a 15% stake in decentralized lending protocol Aave at a $385 million valuation, according to three people familiar with the matter. A potential deal would see Kraken invest 35,000 ETH for 250,000 AAVE tokens and a 15% common equity stake in Aave Group, with sources adding Kraken is exploring syndicating a portion of the roughly $71 million transaction.
Why it matters
The investment would be the first in a planned series of deals under Payward Asset Management, an effort by Kraken's parent to take a more active role in DeFi and other investment opportunities. A person with knowledge of the plans said the firm has both the capital and external partners lined up to backstop future deals, framing Aave as the opening move rather than a one-off. The timing matters: Payward is widely expected to pursue an IPO, and CoinDesk reported in May that the company was raising fresh capital at a $20 billion valuation.
Market impact
The deal would land at a notable moment for Aave. The protocol was thrust into one of DeFi's biggest crises 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. The tokens were deposited as collateral on Aave, and borrowers drained real assets against them, leaving the protocol with an estimated $190 million to $230 million in bad debt even though Aave's own smart contracts were never compromised. The exploit triggered more than $8 billion in withdrawals and exposed the contagion risks of DeFi's interconnected infrastructure.
A Kraken spokesperson declined to comment, and Aave did not respond by publication time. The proposed acquisition sits alongside Payward's April agreement to buy crypto derivatives exchange Bitnomial for up to $550 million, expanding Kraken's CFTC-licensed brokerage, clearing and exchange footprint as it builds a multi-asset platform for a public listing.
Frequently asked questions
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What is Kraken proposing to buy in Aave?
Kraken is in talks to acquire a 15% common equity stake in Aave Group at a $385M valuation, paying 35,000 ETH in exchange for 250,000 AAVE tokens, according to sources familiar with the matter.
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How much is the Aave deal worth and will Kraken fund it alone?
The transaction is worth around $71M, and two sources said Kraken is exploring syndicating a portion of the deal rather than funding it entirely on its own balance sheet.
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Why is Kraken's parent Payward making this move now?
Payward Asset Management plans to take a more active role in DeFi and other investment opportunities, with this deal positioned as the first in a series. Payward was reported in May to be raising fresh capital at a $20B valuation ahead of a widely anticipated IPO.
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How badly was Aave hurt by the KelpDAO exploit?
Lazarus-linked attackers exploited KelpDAO's bridge to mint roughly $292M of unbacked rsETH, deposited it as Aave collateral, and drained real assets, leaving an estimated $190M to $230M in bad debt. More than $8B in withdrawals followed even though Aave's smart contracts were never compromised.
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What other moves has Kraken made ahead of a potential IPO?
Payward agreed in April to acquire crypto derivatives exchange Bitnomial for up to $550M, adding U.S. CFTC licenses covering brokerage, clearing and exchange operations as Kraken builds out a multi-asset trading platform for a public listing.
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