TLDR
- 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 shares
- At $385 million, the offer represents approximately a 70% reduction from Aave’s complete diluted token valuation
- Stani Kulechov, Aave’s founder, rejected the proposal, stating AAVE won’t accept such steep discounts
- The protocol is recovering following April’s KelpDAO breach that resulted in over $8 billion in user withdrawals
Payward, the parent organization of cryptocurrency exchange Kraken, is pursuing negotiations to acquire a 15% ownership stake in Aave, Ethereum’s dominant decentralized lending platform. The transaction would establish Aave’s valuation at $385 million.
Under the terms being discussed, Payward would contribute 35,000 ether tokens to receive 250,000 AAVE governance tokens alongside a 15% common equity position in Aave Group.
The complete package carries an estimated value of roughly $71 million. Reports indicate Kraken is simultaneously exploring opportunities to recruit additional investors to participate in the funding.
Strategic Implications for Payward
This potential acquisition represents the inaugural move in Payward’s broader strategy to develop Payward Asset Management. Industry insiders suggest the company intends to assume a more prominent position in DeFi sectors and pursue additional investment ventures.
Kraken has been aggressively growing its operations in preparation for a potential initial public offering. This past April, Payward completed an agreement to purchase Bitnomial, a crypto derivatives platform, for a maximum of $550 million, securing comprehensive US CFTC regulatory licenses.
Additionally, Payward was reported in May to be pursuing fresh capital funding at a $20 billion company valuation.
Founder’s Strong Rejection
Stani Kulechov, who founded Aave, addressed the speculation on X, emphatically declaring there is “NO WAY” the protocol would accept a 70% valuation discount.
The suggested $385 million price point falls significantly beneath the AAVE token’s comprehensive diluted market capitalization. Kulechov highlighted that Aave presently produces $134 million in yearly revenue, with all proceeds directed to the Aave DAO.
While not dismissing potential token sales entirely, he acknowledged that Aave Labs, the commercial entity operating the protocol, might divest portions of its AAVE token holdings. “Aave Labs owns an allocation of AAVE that multiple market participants have discussed purchasing,” he stated.
Kulechov further criticized the characterization presented in the initial news report as misleading.
Turbulent Period for Aave
These discussions emerge while Aave continues rebuilding following one of this year’s most significant DeFi incidents. During April, cybercriminals associated with North Korea’s Lazarus Group successfully compromised KelpDAO’s cross-chain infrastructure, creating approximately $292 million in fraudulent tokens.
The threat actors deposited these worthless tokens as loan collateral on Aave’s platform and withdrew legitimate digital assets. Once the collateral value collapsed, Aave absorbed between $190 million and $230 million in uncollectible debt.
While Aave’s core smart contract infrastructure remained secure from direct attacks, the incident nonetheless sparked more than $8 billion in protocol withdrawals.
Since the crisis, Aave has implemented an enhanced risk management system and deployed version four of its lending platform. Kulechov successfully advanced his “Aave Will Win” governance initiative in April 2026, which restructured all protocol earnings to flow directly to the Aave DAO and token stakeholders.
He additionally revealed that Aave Labs is currently developing “Aavenomics 3.0,” featuring a novel automated token repurchase system for AAVE.
Neither Kraken nor Aave representatives have officially verified ongoing deal negotiations.
