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Aave community approves Kraken Ink blockchain proposal, moving forward with a centralized lending version aimed at institutional DeFi and revenue expansion.
Author: Akshat Thakur
July 21, 2025 — The Aave community has overwhelmingly approved a proposal to license a centralized version of its lending protocol for deployment on Kraken’s Ink blockchain.
With 99.8% voting in favor, the proposal now moves to the next phase of governance, signaling Aave’s entry into institutional DeFi on a compliant layer-2.
Aave’s governance forum passed an Aave Request for Comment (ARFC) to launch a centralized lending product on Kraken’s Ink blockchain. The Aave Kraken Ink proposal will allow a whitelabel version of Aave v3 to operate under a centralized model tailored for institutions. The next step involves an onchain Aave Improvement Proposal (AIP).
By licensing its code to Ink, Aave aims to expand its adoption beyond DeFi-native users and generate new revenue streams. The DAO will receive at least 5% of borrow volume as protocol income, similar to its Reserve Factor model.
The Ink blockchain, operated by the Ink Foundation and backed by Kraken, is designed to serve as a compliant, scalable platform for tokenized assets. According to the proposal, the partnership presents a strategic opportunity for Aave to grow its presence in the institutional lending sector.
To ensure early success, the Ink Foundation committed over $250 million to liquidity mining incentives for the new lending instance. These funds aim to bootstrap supply and attract institutional borrowers.
While Aave’s total value locked (TVL) reached $40.3 billion in May 2025, data from DeFiLlama shows it has since declined to $33.5 billion. Despite the drop, Aave remains the second-largest DeFi protocol, trailing only Lido’s $34.3 billion.
The Aave Kraken Ink proposal is expected to diversify Aave’s user base and revenues, potentially offsetting recent TVL fluctuations with enterprise-focused expansion.
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