Grayscale Research says Aave token undervalued, $175 target

A leading decentralized finance protocol, Aave, has been labeled undervalued in a new analysis from Grayscale Research, which projects its AAVE token could reach approximately $175 within a year. The report, published this week, estimates the token's current fair value between $80 and $100, compared to a trading price around $77.

Grayscale's valuation is based on treating Aave as a "permissionless on-chain bank" with recurring revenue, rather than just a governance token. The firm estimates the protocol could generate roughly $60 million in revenue in 2026, increasingly anchored by stablecoin activity which provides a more durable earnings base than volatile crypto assets. Applying fintech valuation multiples of 20 to 25 times that revenue yields a fair-value market capitalization between $1.2 billion and $1.5 billion, translating to the $80-$100 per token range.

The more ambitious one-year base case target of approximately $175 depends on several growth drivers. Grayscale's model assumes exponential stablecoin growth, major partnerships through the Horizon initiative, the return of previously withdrawn user deposits, mainstream adoption via the Aave App, and institutions...