Is Aave The BEST Altcoin?

SPEAKER_1 (0:00)

Is Aave the best altcoin? I think it might be. Not because of some narrative or some floating idea out there, it checks three main boxes that most altcoins never really manage to do.

It has real revenue, a real path to tokenization, and the holder setup could get a whole lot better from where it's at right now. And just look at this chart. Over the last 30 days, Aave has sent an average of about $165,000 a day in revenue to the Aave Dow, right after the roughest stretch in its history. And to explain how Aave actually makes money, people deposit crypto and stable coins. Other people borrow against that collateral and begin to pay interest, and most of that interest goes to the original depositors. Aave keeps a small cut, and over the last year that cut was about 13% of the fees. Someone borrows $100 as 6% and pays $6 in interest. The protocol decides to keep somewhere around 60 to 80 cents of that. This is a small toll to pay for a very large road being built. And this again is a revenue metric and not just profit. The Aave Dow still has to pay for development, risk management, and all of the security needed, but the revenue is the engine, and that engine is very real. Now, over the course of 2025, the Aave Dow itself took in about $124 million in revenue. And that's a record that April came about. A bridge exploit tied to the Kelp Dow's RS ETH token hit Aave's markets directly. It wasn't a bug in Aave's core code, but it did hurt. Borrowing had fallen from $29 billion in active loans down to the lowest level of $9.8 billion. Sense has recovered, hanging around the $12.9 billion mark today. And the revenue actively follows where the loans are at. The revenue in the pink level on the bottom of the graph fell very sharply, but a sense started to level out and angling back to the upside. And that Dow's run rate dropped to around $60 million a year. The total value locked bottomed near $11.9 billion in June, back around $18.4 billion, and at more than 50 percent, the business didn't break itself, it shrank. And now it's starting the rebuilding process. And the general chart of Aave's token price doesn't need a miracle. All the Aave system needs is for the loans and the TVL to come back. So we're shaking ourselves off of the bear market blues. We have to look at what is Aave priced at right now when you consider a fully diluted token circulating, and Aave is trading around 43 times its recent Dow revenue annually. You have to remember in 2021, that same measure hit roughly 200X. Now, by no means am I saying that Aave is likely to cascade back to the upside at 200X its revenue in value per token. That was absolute mania built on the future potential of the revenue. But this chart does show how much room sits between today's valuation and what this market is potential of turning into over the course of the next few years.

We have to think about this metric in terms of trading on an X factor versus how much revenue you make for some of these other bigger projects out there. Aave is currently sitting around a 40 to 43 times multiple. Chainlink, however, comes at a much bigger level. Chainlink is around 146 times. So clearly, the market is paying up for what the future infrastructure holds for these bigger projects. Hyperliquid is around 20 times its revenue, and Uniswap comes in at 32 Now, obviously, these are different businesses with different token value models and basic mechanisms behind them. But Aave is not the cheapest, and a premium somewhere else doesn't guarantee that there's a premium to be had here. The case for Aave is actually what comes next and what starts with tokenization. When I think about crypto, I think about crypto was created to solve financial issues. Bitcoin coming out of the housing crisis, the biggest crisis right now that I see happening isn't just the AI bubble of the credit market. It is general mortgages and lending. Here in the United States is the biggest pain point in our economy, and that's where Aave and some of these other lending protocols might find a massive season of glow up as they get integrated, and the SEC moves towards a true tokenization of the markets.

Taking a look at Aave Horizon, this is the market for tokenized real world assets.

It already lists VanEck Tokenized Treasury Fund, and on October 2nd, Aave Governance voted to add tokenized high income funds from the permanent securitized levels. Shortly after that, it approved Aave Institutional. These are loans for institutions against Bitcoin and Ethereum at the 6% to 8% level, with the interest spread going into the Dow. As I say right now, there's $300 million of borrowing demand on the table. Because the programs I just covered are approvals, but not live volume yet. And there's more in this to review. There's a Wellington Fund through Midas, Coinbase Tokenized Stocks on Base, and a Eurostable Coin they call Societe Generale. These are major catalysts on the horizon, and every one of those is a potential new source of loans. Those loans drive that revenue metric. Now the third box we're going to examine here is the Holder Economics. From April of 2025 to April of 26, Aave ran buybacks and acquired more than 200,000 Aave tokens.