Kraken Pursues 15% Stake in Aave Amid Protocol's Recovery Phase

Kraken, a leading cryptocurrency exchange, is negotiating to acquire a 15% ownership stake in Aave, Ethereum's dominant decentralized lending platform. The proposed deal would see Payward, Kraken's parent entity, transfer 35,000 ether tokens in return for receiving 250,000 AAVE tokens and a 15% common equity position in Aave Group.

The transaction values the DeFi protocol at $385 million, representing a significant markdown of approximately 70% from its complete diluted token valuation. However, Stani Kulechov, Aave's creator, has publicly rejected the proposition, stating that the protocol will not accept such steep discounts.

Aave is currently in recovery mode following a major DeFi security incident earlier this year, which saw cybercriminals associated with North Korea's Lazarus Group compromise KelpDAO's cross-chain infrastructure. The attackers leveraged these worthless tokens as collateral within Aave's platform to extract legitimate digital assets, resulting in estimated losses ranging from $190 million to $230 million in uncollectible debt.