Grayscale: Aave's protocol revenue has grown over 6.6 times in the past three years, and AAVE's current valuation is relatively conservative

Grayscale Research's latest report shows that Aave, as the leading protocol in the DeFi lending space, currently has a reasonable valuation range for the AAVE token of $80 to $100.

The report points out that Aave's protocol revenue is expected to grow more than 6.6 times from 2023 to 2025, with an operating profit margin of about 50%, and there is still room for further improvement as the scale expands. The Aave DAO treasury has reached a maximum of $360 million, providing ample capital for the protocol's development.

Grayscale believes that the current price of AAVE at around $75 implies an annualized growth rate of about 9% over the next 10 years, which is a relatively conservative expectation. If Aave can achieve an annualized growth rate of 25%, the corresponding price could reach $227; if it reaches 35%, it could reach $444.

However, the report also emphasizes that Aave's future performance will still depend on the competitive landscape of DeFi lending, regulatory clarity, and the advancement of stablecoin and RWA tokenization businesses.