Frank Downing
Director of AI & Cloud Research at ARK Invest
Aave looks favorably priced at about 6 times sales given its remarkably durable revenue. Per @LorenzoARK, Aave has grown revenue consistently in bull and bear markets, has $60 million year to date and is on pace for over $200 million this year, with deposits and borrows appearing to bottom and V4 set to add substantially. x.comÂ
AAVE looks like a DeFi blue chip at a basement price. It is the top DeFi lending protocol with more than $13 billion in total value locked and real revenue every day, yet at $76 it trades about 80% below its all-time high. x.comÂ
Aave looks like a quality DeFi token that has bottomed and may be on the verge of a sharp rally, with a path traced from 100 to 118, 145 and 200. x.comÂ
Aave's protocol fees do not reach token holders because Labs controls DAO governance and votes itself grants. Labs voted itself $25 million for operations and $17.5 million in performance incentives, including $5 million for launching an app. Buybacks were paused after the rsETH bridge exploit and have not resumed. Despite the protocol's quality, the Aave token is uninvestable and will keep grinding lower; unlike buyback-funded peers, holders get no direct value. x.com x.com x.com x.com x.com … Show more
Aave looks set to reverse higher now that Morpho's $175M fundraising, which drew buying toward its rival, is done, while Aave was oversold to about 7x earnings, very low for DeFi's most dominant protocol. Morpho's raise was co-led by Paradigm, a16z crypto and Ribbit Capital. x.comÂ
Aave is one of a handful of tokens likely to attract traditional allocators such as tech hedge funds, wealthy individuals and family offices, given its fundamentals, longevity and addressable market. Per Aave founder Stani Kulechov, Coinbase tokenized stocks are now live on Aave V4 on Base, letting users borrow USDC against them as Aave aims to bring the $200 trillion global equities market onchain. x.comÂ
Aave is uninvestable because token holders aren't getting the protocol's value. Only about $40-50M has ever gone to token buybacks, against likely hundreds of millions or billions of AAVE inflation used to bootstrap the protocol, and the revenue wasn't used to acquire businesses or grow an Aave empire either. Despite protocol revenue of $907.7M in 2025 by one onchain tally, the token price shows the model isn't working. x.com x.com x.comÂ
Aave stands to benefit if the SEC grants a rumored tokenization exemption, since the TAM for DeFi assets with cash flows and long-term teams would become the whole of finance. The rumored relief would let tokenized securities trade with only a transfer agent, with no broker-dealer license or exchange rules for U.S. retail and foreign investors, which would be massive for onchain finance. Aave founder Stani isn't playing around, and some charts will go bananas if it drops. x.comÂ
Aave should snowball once liquidity fully returns, because it is valued at only about 10% of the over $18B it intermediates while activity is still surging. In the last 30 days it added over $400M of deposits, up 82%, and $254M of active loans, up 98%. x.comÂ
Aave's token is tanking because holders have lost faith in leadership. Wasted operating spending, a proposal to issue a new Horizon token that would divert revenue from AAVE, and a forced v4 migration alienated core advocates and users, and business partners such as Ripple are leaving. Users did not want to switch to v4, and v3's longer-term utility is in question. Aave's team replies that the Horizon proposal was removed after feedback and that dominance has risen since 2024. x.com x.com x.comÂ
An Aave short squeeze grows more likely by the day as shorts pile in without breaking the price lower. A plan is now in place to essentially plug the $250M hole from the recent hack, while open interest sits at an all-time high in coin terms. Price is slightly higher than on the 19th and has not made a lower low since the hack. x.comÂ
