Kraken in talks to buy 15% stake in DeFi lender Aave at $385 million valuation
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Crypto exchange Kraken, part of Payward Inc., is in talks to acquire a 15% stake in decentralized finance (DeFi) protocol Aave at a $385 million valuation, according to three people with knowledge of the matter.
Key facts
- A potential deal would see Kraken investing 35,000 ether (ETH) in return for 250,000 AAVE tokens and a 15% common equity stake in Aave Group, according to a document seen by CoinDesk
- The hackers deposited the tokens as collateral on Aave and borrowed real assets against them, leaving the protocol with an estimated $190 million to $230 million in bad debt when the collateral
- 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
- In May that Payward was raising new capital at a $20 billion valuation, according to sources
Summary
Kraken is evaluating a deal to acquire a 15% stake in DeFi lending protocol Aave, valuing the company at $385 million, according to sources. The proposed investment comes months after Aave weathered the fallout from the KelpDAO exploit, which left the protocol with significant bad debt and triggered billions of dollars in withdrawals despite its smart contracts remaining uncompromised. The potential transaction reflects Kraken's parent company Payward's push to diversify ahead of a potential IPO. A potential deal would see Kraken investing 35,000 ether (ETH) in return for 250,000 AAVE tokens and a 15% common equity stake in Aave Group, according to a document seen by CoinDesk.