Incorrect spelling, explanation: despite the fact, that pronunciation may lead some to this spelling, it is incorrect, because the word instead comes from two words: in stead (from Middle English), meaning in place of a substitute. Therefore instead is the correct form and instade is a misspelling.

Correct spelling, explanation: this form, instead, is created from two separate words in and stead. Here, stead means a place occupied by a substitute. In Middle English, this word functioned as these two coming together, but later they merged into today’s form. Therefore instade is incorrect.

Definition of instead:
adverb, in a matter that replaces something
Instead of playing video games all day, we should go outside.
I don’t like chicken. I will order turkey instead.