•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Grayscale Research published a report on April 8 arguing that the AAVE governance token is undervalued relative to the protocol’s dominance in decentralized finance. The firm pegs fair value between $80 and $100, with a projected upside to roughly $175 over a one-year horizon.
AAVE was trading near $90 at the time of the report’s release, placing it within the estimated fair-value band. The $175 target represents nearly a 95% premium from current levels.
Grayscale cites DeFiLlama data indicating that Aave controls approximately 48% of all on-chain lending activity. The report, led by Grayscale’s head of research Zach Pandl, compares Aave’s position to traditional banks, arguing that Aave outperforms legacy financial institutions on operational costs—an assertion Grayscale says is reinforced by research from the Bank of Canada.
Pandl’s team also highlights Aave’s token value accrual mechanism. The report describes a process in which AAVE tokens are burned using revenue generated from lending activity. With fewer tokens in circulation and demand that is expected to remain the same or grow, the report argues the economics tend to favor token holders over time.
Grayscale launched the Grayscale Aave Trust in October 2024, offering accredited investors a way to gain AAVE exposure without directly using a DeFi wallet. In February 2026, Grayscale filed to convert that trust into a full ETF on NYSE Arca.
If approved, the ETF conversion would make AAVE one of a very small number of DeFi governance tokens accessible through traditional brokerage accounts.
Grayscale’s report acknowledges governance-related challenges that have weighed on AAVE’s price. It points to contributor departures that have created friction within the protocol’s decentralized governance structure, with measurable effects on market sentiment.
The token reached an all-time high near $662 in May 2021. By mid-February 2026, it had risen to around $126 before pulling back to the $90 range amid broader market pressure. Even under Grayscale’s optimistic $175 target, the token would remain well below its historical peak.
The report also notes that Grayscale manages an Aave Trust and is pursuing an ETF product. Investors are prompted to consider alignment of interests when an asset manager publishes research on a holding it already controls.
Grayscale’s analysis frames Aave as a protocol that could become a “household name” in finance. The 48% market share figure is central to that claim. In traditional finance, controlling nearly half of an entire lending market would raise regulatory concerns; in DeFi, Grayscale argues the same position functions as a competitive moat that generates revenue flowing back to token holders through burns.
