- Aave (AAVE) has had an impressive run in the past year.
- Amid growing investor interest in AAVE, Grayscale is looking to capitalize.
- Grayscale has been on an expansion spree in recent months.
Amid the DeFi resurgence in the past year, Aave (AAVE), the largest DeFi lending protocol by TVL, has been a star performer. Moves to incentivize long-term asset holding, including distributing protocol revenue to governance token stakers, appear to be paying off.
The protocol’s governance token has surged over 104% from about $69 this time last year to over $141 at current prices. At the same time, the protocol’s TVL is also up roughly 140% from nearly $5 billion last year to almost $12 billion at the time of writing. As the protocol continues to gather momentum, it has now received another potential boost.
Grayscale Launches Aave Trust
Grayscale is making a play to capitalize on rising interest in AAVE. On October 3, the firm announced it had launched an Aave Trust to grant investors exposure to the eponymous token of the high-flying DeFi lending protocol.
Sponsored
Grayscale disclosed that the fund is open to eligible individual investors and accredited institutional investors. The firm further added that the Trust will trade like other Grayscale single-asset investment Trusts, meaning it will be closed-ended.
Closed-ended funds do not allow for direct withdrawals. As such, the only way to exit these types of funds is for investors to sell their shares. The downside of this system, however, is that the share prices can often differ from the underlying value of the asset, trading at a premium when demand is high, and at a discount when supply exceeds demand. Still, it has the potential to drive up demand for the underlying asset by providing a regulated on-ramp.
The Aave Trust is the latest in a rapid-fire set of releases from Grayscale in recent months.
Grayscale Going All In
Over the past few months, Grayscale has been on an expansion spree, and it is not showing signs of slowing down any time soon. In August 2024 alone, the firm launched three new Trusts for SUI, Bittensor (TAO), and MakerDAO (MKR), respectively.
In September 2024, the firm followed up these launches with an XRP Trust, stoking speculations around an ETF conversion.
These recent launches have attracted a total of over $10 million in assets under management (AuM) for Grayscale as the firm seeks to further cement its place as the largest crypto asset manager in the world, with over $25 billion in AuM.
Read this for more on Aave:
How Aave’s Proposed Fee Switch Incentivizes Long-Term Holding
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SEC’s Chief Enforcer Resigns: Is the Exit Crypto-Related?
