Why Standard Chartered and Grayscale Are Both Betting on Aave

Standard Chartered's crypto research unit and Grayscale's investment team are both betting on Aave (AAVE), the decentralized lending protocol. The two firms rarely align on individual tokens. Standard Chartered tends to favor infrastructure plays. Grayscale has a broader mandate. Now they share a conviction in Aave, a sign the DeFi lender is drawing institutional attention.

Aave is the largest DeFi lending platform by total value locked, with roughly $12 billion in deposits across Ethereum, Polygon, and other chains. Users lend and borrow crypto assets. The protocol generates fees from loans and distributes them to AAVE holders who stake their tokens.

The token is down about 40% from its 2024 high. A pullback in DeFi and competition from newer protocols like Morpho and Spark have hurt it. Trading volumes have thinned. The price has struggled to hold above $100. That underperformance makes the institutional calls interesting. Both firms are known for contrarian positions based on long-term structural trends.

Standard Chartered's crypto arm published research arguing Aave is undervalued relative to its fee generation and network effects. The bank sees Aave as core onchain financial infrastructure, especially as real-world assets like Treasuries migrate to DeFi. Grayscale added AAVE to its DeFi Fund, a basket rebalanced quarterly. Inclusion signals Grayscale's analysts expect Aave to outperform peers over a multi-year horizon.