Grayscale Slaps a $179 Sticker on AAVE, Says DeFi's Favorite Bank Still Has Room to Grow 🏦

Grayscale Research said Aave's AAVE token is undervalued and assigned a one-year base-case price target of $179.11, with a bull case of $270.57 and a bear case of $90.91. The asset manager framed Aave as a "permissionless on-chain bank" that produces recurring revenue, estimating the protocol will generate roughly $60 million in 2026. AAVE traded near $77.23 with a market cap of about $1.17 billion at the time of the report, placing it just below Grayscale's lower fair-value range of $80 to $100.

The fair-value estimate was derived from a discounted cash flow analysis that applied fintech multiples of 20x to 25x, yielding a market cap range of $1.2 billion to $1.5 billion. Grayscale noted that "Aave's revenue has increasingly been anchored by stablecoin activity rather than volatile crypto assets, providing a more durable earnings base as the protocol scales." The base-case target of $179.11 rests on five assumptions, including exponential growth in stablecoin volume, the return of previously withdrawn deposits, the Aave App onboarding mainstream users, institutions building on the V4 architecture, and growth driven by major Horizon partnerships.

The report also flagged Hyperliquid, Uniswap, Sky, and Maple as offering strong relative value. Grayscale said Aave's revenue grew more than sixfold between 2023 and 2025 and that the protocol operates at an estimated 50% margin, with potential support from lending activity, the GHO stablecoin, and institutional products. The firm cautioned that protocol revenue alone does not guarantee token value, noting that fees may flow to liquidity providers, operating costs, or a decentralized autonomous organization, and that token holders generally lack the legally enforceable claims available to shareholders.

AAVE has faced headwinds since the April 2026 Kelp DAO rsETH exploit, which drove a sharp decline in total deposits. Aave founder Stani Kulechov has since presented a new risk framework, while the protocol's total value locked has fallen from $45 billion in 2025 to $13.043 billion at the time of the report. Token buybacks remain on hold pending a governance review, though the DAO treasury peaked above $360 million. Aave V4 has surpassed $50 million in active borrows, up 140% in the prior month. AAVE was down more than 71% over the previous year, even as the 90-day Spot Taker CVD printed green bars in June 2026. Grayscale's broader valuation push mirrors similar work by CoinShares, which placed 2031 base cases on HYPE at $147 and ETH at $4,935.