Joestar
Crypto Analyst, DeFi Analytics Tools Builder, Perpetuals & Tokenization
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 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
Morpho looks set to outperform Aave, with their year-to-date price performance appearing to hit an inflection point. Aave is still dealing with DAO drama and the departure of key contributors, which has overshadowed its V4 launch, and the market is pricing in that execution risk. Morpho keeps taking market share, with RWA collateral at another all-time high of $474M, per Token Terminal data. x.comÂ
Tokenization and demand for real economics make DeFi lending, spot and yield tokens extremely appealing on risk-reward. This unrivaled trend will grow DeFi value 50x or more over multiple years, and fast. The altcoin bear market is forcing better token structures: Ethena, Uniswap and Aave are improving unit economics, Chainlink to some extent. Battle-tested Pendle and Morpho, with efficient businesses and institutional ties, will re-rate hard. A DeFi Summer return is nearly certain. 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 is under pressure as holders send tokens to exchanges, which usually signals selling. A $292M exploit left about $200M of bad debt, and roughly $6.6B has since left the platform. Aave is still a big DeFi project, but it is not in a good spot right now. 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
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
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
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