Kraken is in discussions to acquire a 15% stake in the decentralized finance lending protocol Aave through its parent company Payward, a transaction that values Aave at $385 million.

Aave operates a decentralized lending platform that enables users to supply assets to liquidity pools and borrow against crypto collateral using smart contracts.

The proposed investment would involve 35,000 ETH and 250,000 AAVE tokens in exchange for the equity stake, according to a CoinDesk report that cited three sources familiar with the matter. A separate arrangement would syndicate part of the transaction, valued at about $71 million, the same report said. A Kraken spokesperson declined to comment, and Aave did not respond to CoinDesk’s request for comment before publication. A document reviewed by CoinDesk estimated the deal’s total value at $385 million. Two sources familiar with the discussions said the investment would be the first in a series of transactions under Payward Asset Management, which plans to pursue additional investments in decentralized finance and other digital asset opportunities. Payward has indicated it has sufficient capital and external partners to support such deals. The transaction follows Payward’s acquisition of the U.S. crypto derivatives platform Bitnomial in April for up to $550 million and the launch of a tokenized IPO program in June that allows Kraken users to register interest in upcoming U.S. public offerings. The program processed more than $30 billion in transaction volume during its first year, including over $6 billion settled on chain, and serves more than 125,000 holders worldwide.

The outcome of the negotiations remains uncertain, and Aave has not indicated whether it will participate in the investment.