Grayscale files for spot Aave (AAVE) ETF

Doohyun Hwang

Summary

Grayscale said it filed with the SEC to convert its Aave (AAVE) trust into a spot ETF.
The filing sets up competition with Bitwise, which has submitted documents for 11 digital-asset-related funds that include Aave.
Aave is up about 9% from the prior day at around $119, with a market cap of about $1.8 billion; Grayscale’s proposed Aave ETF management fee is 2.5% of NAV.

Grayscale, a global digital-asset (cryptocurrency) manager, is pushing to launch a spot exchange-traded fund (ETF) tied to Aave (AAVE), widely seen as a bellwether in decentralized finance (DeFi).

According to filings disclosed by the U.S. Securities and Exchange Commission (SEC) on the 13th (local time), Grayscale submitted an application to convert its existing “Grayscale Aave Trust” into a spot ETF.

With the filing, Grayscale is set to compete with Bitwise, which previously applied for a related product. Bitwise submitted paperwork in December to launch 11 digital-asset-related funds that include Aave.

Aave is a decentralized lending protocol that holds one of the most dominant positions in the DeFi market. Data from The Block show Aave’s token was trading around $119, up about 9% from the previous day. Its market capitalization stands at roughly $1.8 billion. The all-time high was $661.69, set in April 2021.

The management fee for the proposed Grayscale Aave ETF was set at 2.5% of net asset value (NAV), and the fee will be paid in Aave tokens. Coinbase will provide custody and prime brokerage services, and the fund is targeting a listing on NYSE Arca.

AAVE