Aave, a decentralized lending and borrowing protocol, raises $25M from Blockchain Capital, Standard Crypto, Blockchain.com Ventures, and others
Adriana Hamacher / Decrypt :
Context & Ripple Effects
Aave's $25M round lands one year after Compound's $25M Series A from a16z and months after BlockFi's $30M Series B, confirming decentralized lending as a funded category rather than an experiment. For lead investor Blockchain Capital — which says it accepted $25M of Ripple's XRP into a new fund and targets DeFi among six focus sectors — the deal extends a thesis built on stakes in Ripple and Coinbase.
Blockchain.com Ventures' participation reads differently in hindsight: the parent firm later lent $270M to 3AC and was forced into an asset sell-off to raise capital at a severely lowered valuation. And Aave itself kept appreciating as a strategic asset — sources reported Kraken in talks to buy a 15% stake in the protocol at a $385M valuation six years on.
First-order effects
- Aave gains a war chest from established crypto VCs, putting it financially level with rival Compound's own $25M raise and letting it compete with BlockFi for lending-market share without revenue pressure.
Second-order effects
- Blockchain Capital's dual role as Ripple backer and DeFi investor pushes traditional crypto firms toward holding protocol exposure directly — a path Kraken later formalizes by negotiating token purchases (250,000 AAVE for 35,000 ETH) instead of conventional equity.
Third-order effects
- If exchange-protocol ownership becomes standard, lending protocols shift from community-governed infrastructure to strategic assets on exchange balance sheets — while the same entanglement cuts both ways, as Blockchain.com's post-3AC distress shows when a lender-investor turns seller under stress.
The trend: Crypto venture capital is consolidating around decentralized lending protocols as core portfolio assets, with exchanges evolving from service providers into direct protocol stakeholders.