Kraken parent Payward and its clients buy AAVE tokens

Payward buys AAVE tokens through its fund and clients

Payward, the parent company of crypto exchange Kraken, said it and its clients bought an undisclosed amount of AAVE tokens on the secondary market. An exchange is a platform where crypto is traded.

The purchases were made through Digital Asset Special Investments I, LP, a Payward-affiliated investment fund, and its asset management clients, according to an announcement on Thursday. Payward said the tokens were bought from existing holders, not directly from Aave.

Payward and Aave are also exploring future collaboration, the announcement said, without giving details. Payward said it may make further token purchases.

Key details from the announcement

• Payward and its clients bought an undisclosed amount of AAVE tokens on the secondary market.
• The deal involves token purchases only, with no mention of equity in Thursday's announcement.
• Payward said it may buy more tokens and is exploring further collaboration with Aave.
• The amount paid and the number of tokens bought were not disclosed.

What Payward and Aave said

Gurpreet Oberoi, vice president of Payward asset management and institutional, said the investment reflects Payward's long-term conviction in onchain credit markets and DeFi, and growing client demand for exposure to that infrastructure. DeFi means decentralized finance, or financial services run on blockchain networks.

Aave Labs founder and chief executive Stani Kulechov said working with Payward is a strategic step toward bringing Aave to more retail and institutional users.

A person familiar with the matter told CoinDesk that buying tokens on the market rather than directly from Aave is a signal of alignment and paves the way for future collaboration. That comment is the person's view, not a statement from Payward or Aave.

How this differs from earlier talks

The deal has changed since CoinDesk first reported talks in June, the person familiar with the matter said. The earlier proposal involved 250,000 AAVE tokens and a 15% common equity stake in Aave Group at a $385 million valuation.

Thursday's announcement makes no mention of an equity stake. No reason for the change was given in the supplied material, and it is not confirmed whether equity talks will continue.

Payward's wider expansion and Aave's size

Payward said the investment supports its effort to build an asset management business covering digital assets, structured yield and tokenized investments. The company said its wider expansion is organized around four areas: trading, banking, asset management and Payward Services, which supplies financial infrastructure to banks, fintechs and other platforms.

Aave lets users deposit digital assets to earn interest and borrow against collateral through blockchain-based smart contracts, which are self-running programs on a blockchain. The announcement said Aave has about $33 billion in net deposits and $11 billion in active loans. AAVE holders can vote on decisions affecting the protocol and its treasury.

The announcement came as other crypto companies have also made deals. Payward previously acquired U.S. derivatives exchange Bitnomial in a deal worth up to $550 million and completed its purchase of stablecoin payments company Reap in July, following an agreement valued at up to $600 million. A stablecoin is a token designed to hold a steady value, often linked to a currency such as the U.S. dollar.

What happens next

Payward said it may make further purchases of AAVE tokens. Payward and Aave said they are exploring future collaboration, but no details, timeline or terms were given in the announcement.

Sources

• CoinDesk