Grayscale Investments launched a new fund for Aave's governance token, AAVE.

The Grayscale Aave Trust allows qualified investors to gain exposure to AAVE, which serves as the governance token for the Aave platform, a leading decentralized finance (DeFi) protocol. Aave facilitates transparent, decentralized borrowing and lending through smart contracts, eliminating the need for traditional intermediaries.

This fund expands Grayscale’s range of single-asset crypto investment products. In August, Grayscale launched similar trusts for Sky (formerly MakerDAO), Bittensor, and Sui. As the largest crypto asset manager, Grayscale oversees roughly $21 billion in assets, with its well-known products including the Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE).

The Grayscale Aave Trust invests exclusively in AAVE, joining other single-asset funds for tokens like Basic Attention Token (BAT) and Chainlink. Aave remains DeFi's most popular lending protocol, holding nearly $12 billion in total value locked (TVL), according to DefiLlama.

In July, Aave token-holders approved a proposal to enhance its tokenomics, introducing a system that allocates a portion of the platform's revenue to AAVE stakers. The platform generates income from the liquidation of cryptocurrency-backed loans.

Over the past 12 months, AAVE has surged by more than 110%, according to CoinMarketCap. Rayhaneh Sharif-Askary, Grayscale’s head of product and research, emphasized Aave’s goal of optimizing lending and borrowing through blockchain technology, removing intermediaries, and minimizing reliance on human judgment.

In August, Grayscale’s global head of ETFs, Dave LaValle, also highlighted the growing market for cryptocurrency ETFs, forecasting an expansion to include more single-asset products and diversified crypto indexes.