Aave is the largest decentralized lending protocol, allowing users to lend and borrow crypto assets without intermediaries. Depositors earn yield by providing tokens to liquidity pools, while borrowers provide crypto collateral to take out loans, with smart contracts automatically managing the process.
The protocol was placed at the center of one of DeFi’s biggest crises in April after attackers linked to North Korea’s Lazarus Group exploited KelpDAO’s cross-chain bridge to mint approximately $292 million worth of unbacked rsETH.
The hackers deposited the tokens as collateral on Aave and borrowed real assets against them, leaving the protocol with an estimated bad debt of between $190 million and $230 million when the collateral became worthless.
Although Aave’s own smart contracts were never compromised, the exploit triggered more than $8 billion in withdrawals as users rushed to reduce their exposure, highlighting the contagion risks of DeFi’s interconnected ecosystem.
Kraken has accelerated its acquisitions as parent company Payward prepares for a possible public listing, targeting companies that expand its regulated business infrastructure.
In April, Payward agreed to acquire crypto derivatives exchange Bitnomial for up to $550 million, adding a full suite of U.S. CFTC licenses spanning brokerage, clearing and exchange operations. The deal follows Kraken’s broader effort beyond spot crypto trading as it builds a multi-asset platform ahead of a widely anticipated IPO.
