Grayscale Launches AAVE Trust as Aave (AAVE) Continues to Shine

Amid the DeFi resurgence in the past year, Aave (AAVE), the largest DeFi lending protocol by TVL, has been a star performer

DeFi lending protocol Aave (AAVE) has enjoyed a stellar year with the introduction of measures to encourage long-term asset holding, such as distributing protocol revenue to governance token stakers.

The protocol's governance token has seen a remarkable surge of over 104%, climbing from around $69 this time last year to over $141 at current prices. This上昇 coincides with a significant increase in the protocol's TVL, which has risen by about 140% from nearly $5 billion last year to almost $12 billion at the time of writing.

In the latest development, Grayscale is setting up an Aave Trust to capitalize on the rising interest in AAVE.

Grayscale Launches Aave Trust

On October 3, Grayscale announced the launch of an Aave Trust to provide investors with exposure to the eponymous token of the high-flying DeFi lending protocol.

The fund is open to eligible individual investors and accredited institutional investors, according to Grayscale. The Trust will trade like other Grayscale single-asset investment Trusts, which means it will be closed-ended.

Closed-ended funds do not permit direct withdrawals. Hence, the only way to exit these funds is for investors to sell their shares. The downside of this system, however, is that the share prices can often deviate 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 marks the latest in a rapid-fire series 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 any signs of slowing down. 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 of a near 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.