Grayscale: AAVE is undervalued; $179 one-year base target

Grayscale Research says the Aave token AAVE is undervalued and places a fair-value range at $80-$100. The firm sets a one-year base-case price target of $179.11 and models a bear case at $90.91 and a bull case at $270.57.

The analysis applied a discounted cash flow model to project future earnings, then used fintech valuation multiples of 20x to 25x to derive a fair-value market capitalization range of $1.2 billion to $1.5 billion. That market-cap range implies the $80-$100 price band for AAVE.

Grayscale’s $179.11 base case is based on a scenario with stronger adoption and revenue growth and rests on five assumptions: exponential growth in stablecoin activity; major partnerships on the Horizon roadmap; the return of previously withdrawn deposits; mainstream user adoption of the Aave App; and institutions building on Aave’s V4 architecture to deepen liquidity.

The report projects roughly $60 million in protocol revenue by 2026 and notes, “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.”

At the time of the report AAVE traded near $77.23, with a market capitalization of about $1.17 billion, slightly below Grayscale’s lower fair-value estimate. Reaching the $179.11 base case would represent roughly a 132% gain from that spot price.

The firm also highlighted Hyperliquid, Uniswap, Sky and Maple as other relative-value opportunities.

Grayscale acknowledged headwinds after an April exploit of Kelp DAO’s rsETH product, which caused a steep decline in total deposits on Aave, and noted that the protocol’s transparent handling of the episode strengthened its institutional credibility.

The analysis ties the price scenarios to specific operational and adoption milestones, such as partnership rollouts and institutional integration on V4, rather than to short-term market moves.