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

Kraken is negotiating to acquire a 15% common equity stake in Aave Group at a $385 million company valuation. The proposal would combine an ETH investment and token transfers with a minority equity position. Talks are ongoing and no agreement has been finalized.

Under terms discussed, Kraken would invest 35,000 ETH — about $55 million at current prices — and transfer 250,000 AAVE tokens valued at roughly $20 million. The parties estimate the two assets together at about $71 million in value.

The equity would represent 15% of Aave Group, the corporate entity that develops and supports the Aave lending protocol. Kraken’s parent company, Payward, has pursued strategic positions as it prepares for a potential initial public offering.

The talks follow an April incident involving KelpDAO, which prompted large withdrawals from the Aave protocol even though Aave’s smart contracts were not directly compromised. Aave has carried out governance and technical work since the incident.

The proposed transaction highlights a gap between the company’s equity valuation and the AAVE token market value. Kraken’s deal would value the company at $385 million, while the AAVE token trades at a market capitalization near $1.24 billion. Protocol revenue is directed to token holders through the DAO treasury and a buyback program that uses protocol income to purchase AAVE, while the company focuses on building and operating the software.

A major bank recently began coverage of AAVE with a long-term price target that implies substantial upside for the token by the end of the decade. If completed, Kraken’s package of tokens and equity would give the exchange exposure to both the on-chain token economics and the company-level business.