Cryptocurrency exchange Kraken is reportedly in advanced talks to acquire a 15% stake in the leading decentralized lending protocol Aave. According to sources close to the matter, the potential investment would value Aave at $385 million. Kraken, operating under Payward Inc., plans to allocate 35,000 ETH (roughly $71 million) in exchange for 250,000 AAVE tokens and a 15% equity position in Aave Group common shares.
Two insiders, who requested anonymity because discussions are private, said Kraken may also syndicate the investment to other backers. A third source indicated this could be the inaugural deal under Payward Asset Management’s expansion, signaling Kraken’s ambition to take a more active role in DeFi and alternative investments.
Aave remains one of the largest decentralized lending platforms, enabling users to earn yield by supplying assets to liquidity pools or borrow against crypto collateral without intermediaries. However, the protocol was rocked in April when attackers linked to North Korea’s Lazarus Group exploited a bug in KelpDAO’s cross‑chain bridge to mint $292 million in unbacked rsETH. The fraudulent tokens were used as collateral on Aave to borrow genuine assets, leaving between $190 million and $230 million in bad debt after the collateral became worthless. While Aave’s own smart contracts were not directly compromised, the incident triggered an exodus of over $8 billion in assets, underscoring the contagion risks within interconnected DeFi ecosystems.
The news of Kraken’s interest sparked a sudden rally in AAVE’s price, highlighting the market’s view that institutional backing could bolster confidence after the recent turmoil.
