Kraken Eyes 15% Stake in Aave DeFi Protocol at $385M Valuation

Crypto exchange giant Kraken, operating under its parent company Payward Inc., is reportedly in advanced discussions to acquire a significant minority stake in Aave, one of the most prominent decentralized finance lending protocols in the industry. According to three individuals familiar with the matter, the proposed deal would see Kraken picking up a 15% stake in Aave at a valuation of $385 million.

The financial structure of the potential transaction is notably specific: Kraken would invest 35,000 ETH in exchange for 250,000 AAVE tokens alongside a 15% common equity stake in Aave Group. Sources who requested anonymity due to the private nature of the deal indicated that Kraken is exploring syndication options for the transaction, which carries an estimated value of approximately $71 million.

Beyond this single investment, insiders suggest the Aave deal could be just the beginning. A third source close to Payward's strategic plans revealed that this acquisition is intended to be the first in a broader series of moves designed to establish Payward Asset Management as a serious player in decentralized finance and alternative investment opportunities. According to this person, the firm has both the capital reserves and the partnership network necessary to pursue and back such ventures.

Neither Kraken nor Aave issued official statements in response to media inquiries prior to publication.

Aave holds the position of the largest decentralized lending protocol in the crypto ecosystem. The platform enables users to lend and borrow digital assets without relying on traditional financial intermediaries. Through liquidity pools managed entirely by smart contracts, depositors earn yield while borrowers access funds by pledging crypto assets as collateral.

The timing of this potential deal is significant given the turbulent period Aave recently endured. In April, the protocol became collateral damage in one of DeFi's most damaging crises when hackers linked to North Korea's Lazarus Group exploited a vulnerability in KelpDAO's cross-chain bridge. The attackers minted approximately $292 million worth of unbacked rsETH tokens, deposited them as collateral on Aave, and withdrew real assets against them — leaving the protocol saddled with an estimated $190 million to $230 million in bad debt once the fraudulent collateral lost all value.

Despite Aave's own smart contracts remaining fully intact throughout the incident, the fallout was severe. More than $8 billion in user deposits were withdrawn as participants rushed to limit their exposure, underscoring the cascading contagion risks inherent in DeFi's tightly interconnected architecture.

For Kraken and its parent Payward, the Aave talks are part of a broader expansion strategy ahead of what many expect to be a highly anticipated initial public offering. The company has been accelerating its acquisition activity, most recently agreeing in April to purchase crypto derivatives exchange Bitnomial for up to $550 million — a move that added a comprehensive suite of U.S. CFTC regulatory licenses covering brokerage, clearing, and exchange operations.

Further underlining Payward's aggressive growth posture, reports from May indicated that the company was seeking to raise fresh capital at a $20 billion valuation, signaling strong investor confidence despite broader market uncertainties. The potential Aave investment would align with Payward's stated ambition to build a diversified, multi-asset financial platform that extends well beyond traditional spot cryptocurrency trading.