Grayscale and CoinShares are taking a page from traditional finance to value a crypto asset. The two asset managers have applied conventional valuation techniques to AAVE, the token of the Aave lending protocol, and arrived at a target price of $175. The move signals a broader institutional push to treat DeFi tokens less like speculative coins and more like revenue-generating equities.
Valuing a token like a stock
The $175 target comes from modeling AAVE as a claim on protocol fees, similar to how analysts value a company based on earnings. Grayscale and CoinShares are effectively treating the token's staking yield and buyback mechanisms as a dividend stream. It's a playbook more common on Wall Street than in crypto, and it reflects a growing comfort with DeFi's cash flows.
Why institutions are looking at DeFi revenue
Institutional investors have been circling revenue-generating decentralized finance protocols for months. Aave, which charges borrowers interest and splits fees with token stakers, offers a tangible yield — something that's become harder to find in traditional markets. Grayscale and CoinShares are betting that this kind of structure can attract capital that previously stayed on the sidelines.
What the $175 target says about the sector
A target price doesn't guarantee the token will hit that level, but it does show that these firms see AAVE as undervalued by conventional measures. It also suggests that the asset managers are willing to move beyond simple index products into active, valuation-driven picks. For Aave, the endorsement from two of the largest crypto fund managers could shift how other analysts approach the protocol.
What comes next
The Grayscale and CoinShares reports are likely just the start. Other asset managers are expected to follow with their own valuations of DeFi tokens, especially those with clear revenue models. The open question is whether the broader market will accept these traditional finance frameworks — or treat them as one more narrative in a sector that rarely trades on fundamentals.
