Kraken is in advanced discussions to buy a 15% interest in Aave Group as the crypto exchange deepens its push into decentralized finance, CoinDesk reported Thursday, citing people familiar with the negotiations.

The proposed transaction values Aave at $385 million and would involve Kraken investing 35,000 ETH, worth about $31 million, in exchange for 250,000 AAVE tokens and an equity stake.

According to the report, Kraken is looking to syndicate part of the approximately $71 million investment and sees the deal as the first in a series of strategic investments under Payward Asset Management, a new initiative built to expand the firm’s investment activities beyond its core exchange business.

The talks come as Kraken accelerates its expansion ahead of an expected IPO. The company recently agreed to acquire derivatives exchange Bitnomial and has reportedly been raising fresh capital at a $20 billion valuation.

Aave, meanwhile, remains the largest DeFi lending protocol despite facing heavy withdrawals earlier this year following a major exploit targeting Kelp DAO’s rsETH cross-chain bridge.

According to a new report from Standard Chartered, Aave could rise to $3,500 by the end of 2030 as growth in DeFi and tokenized assets fuels demand for onchain lending.

Standard Chartered’s digital assets research head views Aave as one of the most established infrastructure providers in DeF. The bank expects tokenized real-world assets actively used in DeFi to expand dramatically by 2030, creating new opportunities for lending protocols that can connect digital and traditional financial markets.

The report also highlighted potential catalysts including Aave’s Horizon platform, which targets institutional adoption through permissioned lending markets backed by tokenized assets.