Grayscale Applies Wall Street Valuation Models to AAVE

Crypto Insight Summary: Grayscale and CoinShares are applying traditional valuation techniques to crypto assets as institutions explore revenue-generating DeFi protocols. Aave's native cryptocurrency could reach $175 under a one-year base-case scenario as asset managers increasingly apply traditional finance valuation models to decentralized finance (DeFi) tokens, according to a new report by Grayscale Research. The digital asset manager [said](https://research.grayscale.com/reports/guide-to-buying-the-dip-valuing-crypto-with-cash-flows) Aave could generate about $60 million in net income in 2026 and placed the token's current fair value at $80 to $100. The analysis used discounted cash flows, earnings multiples and comparisons with banks and fintech companies. Aave traded at $75 on Thursday, according to CoinGecko. Grayscale said Aave’s revenue rose more than sixfold between 2023 and 2025, while the protocol operates at an estimated 50% margin. It argued that Aave’s lending activity, GHO stablecoin and institutional products could support future earnings growth. However, protocol revenue alone doesn't guarantee token value, the research added. The asset manager's 2031 base case values HYPE at $147 and ETH at $4,935, although most of the projected ETH value comes from the token's collateral and monetary role rather than cash flows. CoinShares described Hyperliquid as a more direct example of token-level value accrual because 99% of protocol fees are used to buy back HYPE through its Assistance Fund. Crypto Insight Analysis: Direction: Bullish AAVE / Neutral ETH Impact: Minor Impact Horizon: Mid-term (1-8 weeks) Reasoning: Institutional adoption of traditional valuation models boosts AAVE's credibility, but limited immediate market impact.