Key Highlights
- Payward, Kraken’s parent entity, is negotiating to acquire a 15% ownership position in DeFi protocol Aave for approximately $71 million
- The transaction structure involves exchanging 35,000 ETH for 250,000 AAVE tokens plus equity ownership
- At a $385 million valuation, the offer represents approximately 70% below Aave’s current fully diluted market cap
- Stani Kulechov, Aave’s founder, publicly rejected the proposal, stating the protocol won’t accept such steep discounts
- The protocol is in recovery mode following the KelpDAO security breach that sparked more than $8 billion in user withdrawals
Cryptocurrency exchange Kraken is pursuing an equity position in Aave, Ethereum’s premier decentralized lending platform. The proposed transaction would establish Aave’s valuation at $385 million.
Under the terms being discussed, Payward would contribute 35,000 ether tokens in return for 250,000 AAVE tokens alongside a 15% common equity position in Aave Group.
The complete transaction carries a price tag of roughly $71 million. Reports indicate that Kraken is simultaneously seeking additional investors to participate in the funding round.
Strategic Implications for Payward
This acquisition would mark the inaugural investment for Payward Asset Management’s expansion strategy. Industry insiders suggest the company intends to increase its participation in decentralized finance and related investment sectors.
Kraken has been aggressively expanding its operations in anticipation of a potential stock market debut. Last April, Payward finalized an agreement to purchase crypto derivatives platform Bitnomial for as much as $550 million, securing comprehensive US CFTC regulatory approvals.
Additionally, reports surfaced in May indicating Payward was pursuing fresh capital at a $20 billion company valuation.
Founder’s Strong Rejection
Stani Kulechov, Aave’s creator, took to X to address the speculation, emphatically stating there’s “NO WAY” the protocol would accept a 70% discounted sale price.
The suggested $385 million valuation falls significantly short of the AAVE token’s fully diluted market capitalization. Kulechov highlighted that Aave presently generates $134 million in annual revenue, with all proceeds flowing to the Aave DAO.
While not dismissing all discussions, he acknowledged that Aave Labs, the commercial entity supporting the protocol, might divest some of its AAVE token holdings. “Aave Labs owns an allocation of AAVE that multiple market participants have discussed purchasing,” he clarified.
Kulechov further criticized the original reporting as containing inaccurate characterizations.
Tumultuous Year for Aave
This investment discussion emerges while Aave continues recovering from a significant DeFi security incident earlier this year. During April, attackers associated with North Korea’s Lazarus Group compromised KelpDAO’s cross-chain infrastructure and generated approximately $292 million in fraudulent tokens.
The malicious actors deposited these worthless tokens as loan collateral on Aave’s platform and withdrew genuine assets. Once the collateral lost all value, Aave faced estimated losses between $190 million and $230 million in uncollectable debt.
While Aave’s core smart contract infrastructure remained secure from direct attacks, the incident nevertheless precipitated withdrawals exceeding $8 billion from the protocol.
Since the crisis, Aave has implemented an enhanced risk management framework and deployed the fourth iteration of its protocol. Kulechov successfully advanced his “Aave Will Win” governance initiative in April 2026, which reallocated all protocol earnings to the Aave DAO and token stakeholders.
He also revealed that Aave Labs is currently developing “Aavenomics 3.0,” featuring a new automated token repurchase system for AAVE.
Both Kraken and Aave have declined to officially verify that negotiations are underway.
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