On February 13, 2026, Grayscale submitted an S-1 registration statement to the U.S. Securities and Exchange Commission, seeking to convert its AAVE Trust into an exchange-traded fund. The move follows Bitwise's AAVE ETF proposal filed in December 2025, intensifying competition among crypto asset managers.
AAVE: Governance Token of a Leading DeFi Lending Protocol
AAVE is the native governance and utility token of the Aave protocol, a decentralized lending and borrowing platform. Market data cited in reports places AAVE's market capitalization near $1.8 billion, with an all-time high of $661.69 reached in April 2021. European markets already offer AAVE-linked products—21Shares AAVE ETP and Global X AAVE ETP—but these remain unavailable to U.S. investors.
Fee Structure and Custody Arrangements
Under the proposal, the Grayscale AAVE ETF would charge a 2.5% sponsor fee based on net asset value, payable in AAVE. Grayscale named Coinbase as prime broker and custodian. Shares would list on NYSE Arca.
Grayscale's Track Record of Trust-to-ETF Conversions
Grayscale has previously converted closed-ended trusts into ETFs, including its Bitcoin Trust (GBTC), which involved a legal battle with the SEC before paving the way for spot bitcoin ETFs. Separately, Grayscale recently filed an S-1 to convert its NEAR Trust into an ETF, holding roughly $900,000 in assets. The NEAR trust had not consistently met its investment objective, Grayscale disclosed. The AAVE ETF filing continues this strategy of transforming illiquid trusts into transparent, easily traded ETF structures.