Crypto exchange Kraken is in talks to acquire a 15% stake in the decentralized lending protocol Aave. The deal values the Aave company at $385 million.
Kraken would invest approximately 35,000 ETH, worth around $55 million, to receive a package that includes 250,000 AAVE tokens and a 15% common equity stake in Aave Group, the company behind the protocol.
The move follows Aave's recovery from the KelpDAO exploit in April, which triggered massive withdrawals. For Kraken's parent company, Payward, the investment represents a strategic diversification ahead of a potential public offering.
The deal also coincides with a bullish forecast from Standard Chartered bank. The bank initiated coverage of the AAVE token with a price target suggesting nearly fifty times upside by the end of the decade, based on the growth of tokenization and onchain credit.
A significant valuation discrepancy exists. The Kraken deal values the Aave company at $385 million, while the AAVE token currently trades at a market capitalization of about $1.24 billion, more than three times the equity value. This highlights the ongoing debate in crypto about value capture between traditional company equity and protocol tokens.