Kraken is in advanced talks to take a stake in Aave Group, the entity behind the Aave lending protocol. The reported structure calls for Kraken to invest 35,000 ETH in exchange for 250,000 tokens and a 15% common equity stake in Aave Group. At current market prices cited in the report, that package is worth about $71 million, which implies a total valuation of roughly $385 million for Aave Group on a pro-rata basis.
No agreement has been finalized. Kraken declined to comment, and Aave did not respond before publication. The report also says Kraken may syndicate part of the $71 million commitment, bringing in outside investors instead of funding the full amount alone.
Payward Asset Management may use the deal as its first move
If completed, the transaction would be the first under Payward Asset Management, a new internal initiative named after Kraken’s parent company, Payward. One source described the investment as the beginning of a broader plan rather than a single isolated position. The idea is to build an investment arm that takes direct exposure to DeFi platforms instead of treating crypto assets only as exchange listings.
Aave remains the largest decentralized lending protocol in crypto by the report’s description. Users lend and borrow digital assets through smart contracts, without relying on a centralized intermediary. Depositors supply tokens to liquidity pools to earn yield, while borrowers post crypto collateral to access loans.
Talks come after the KelpDAO bridge exploit shook Aave
The timing stands out because Aave has spent the past two months recovering from the fallout of the KelpDAO incident. In April 2026, attackers linked to North Korea’s Lazarus Group exploited a vulnerability in KelpDAO’s cross-chain bridge and minted about $292 million in unbacked rsETH. Those tokens were then deposited into Aave as collateral to borrow legitimate crypto assets.
Once the bad collateral was exposed, Aave was left with between $190 million and $230 million in bad debt. The report says Aave’s own smart contracts were not directly compromised; the failure originated in KelpDAO’s bridge infrastructure. Even so, users pulled more than $8 billion from the protocol as they reduced exposure.
Industry participants moved to address the shortfall. A coalition called DeFi United, including Lido, EtherFi, and Ethena, helped respond to the damage. Aave Labs also revised how it evaluates new collateral assets. On June 10, Aave founder Stani Kulechov proposed a binding four-layer risk framework covering asset risk, bridge risk, monitoring, and chain risk. The framework was developed with risk firm LlamaRisk and is under governance review.
AAVE rose about 15% after the report
The reported stake talks surfaced as Payward pushes toward a planned IPO. In May, Payward was reported to be raising fresh capital at a $20 billion valuation. Separately, the company agreed to acquire derivatives exchange Bitnomial in a deal worth up to $550 million, adding a set of CFTC-regulated brokerage, clearing, and exchange licenses.
Markets reacted quickly. AAVE rose roughly 15% after the news and traded near $80. Around the same time, Standard Chartered initiated coverage on AAVE with a $3,500 price target for 2030. The report linked that target to the bank’s expectations for growth in tokenized assets and on-chain lending demand.
Several points remain open: whether the deal is actually signed, which investors join Kraken’s syndicate if outside capital is brought in, and whether Payward Asset Management follows with more DeFi equity investments. For now, this is still a reported negotiation, not a completed transaction.