Grayscale launches Aave Trust to leverage DeFi lending boom

Aave's native token value spiked by 3% in the past hour to $143 following the news.

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

Grayscale has announced the launch of the Grayscale Aave Trust—a crypto investment fund focused on the DeFi lending protocol Aave, according to an Oct. 3 statement.

Following the announcement, Aave’s token (AAVE) saw a 3% increase within the last hour, reaching $143, according to data from CryptoSlate. However, the token has declined by over 16% in the past week.

Aave Trust

The newly launched fund would offer accredited individual and institutional investors direct exposure to AAVE. Grayscale stated:

“The Trust is one of the first securities solely invested in and deriving value from the price of Aave (“AAVE”) that enables investors to gain exposure to AAVE in the form of a security while avoiding the challenges of buying, storing, and safekeeping AAVE directly.”

Currently, the Trust holds approximately $150,000 in assets, as shown on its official website.

Aave is a decentralized lending platform built on Ethereum, facilitating automated crypto loans backed by other tokens as collateral. The platform also allows users to lend their assets and earn interest.

Aave is the largest lending protocol by total value locked (TVL), with around $20 billion currently locked, according to DeFiLlama data,

Further, the platform is one of the most utilized in the DeFi sector. In the past 24 hours, Aave generated over $1 million in fees, surpassing major blockchain networks like Binance Smart Chain and Cardano, according to CryptoFees data.

Rayhaneh Sharif-Askary, Grayscale’s Head of Product & Research, highlighted that the Aave Trust could reshape traditional finance. She emphasized that Aave’s decentralized model aims to enhance lending and borrowing by leveraging blockchain and smart contracts, reducing intermediaries, and minimizing human involvement.

She explained:

“By leveraging blockchain technology and smart contracts, Aave’s decentralized platform aims to optimize lending and borrowing while removing intermediaries and reducing reliance on human judgment.”

Meanwhile, this launch comes less than a month after Grayscale’s recent introduction of its XRP Trust. The company now manages Trusts for over 20 digital assets, including Solana, Litecoin, Chainlink, and ZCash.

According to CoinGlass data, the total value of assets under Grayscale’s crypto trust management is roughly $7 billion.

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