With $30 billion in total value locked, Aave controls almost half the DeFi lending market.
Moreover, Aave has leapfrogged Circle to become the biggest business on Ethereum after Tether, according to data from Token Terminal.
And yet the seven-year-old project still isn’t getting the respect many of its supporters believe it deserves, judging by its relatively weak price-to-sales, or P/S, ratio.
Similar to price-to-earnings ratios in the stock market, this metric is often used to compare a DeFi project’s market value to the income it generates from fees.
And Aave’s P/S is 39 times, which is much lower than Venus and Maple Finance, which have ratios of 51 times and 56 times, respectively, according to data from Token Terminal.
Buzzier markets
Based on P/S data, the market seems to be pricing Aave’s growth conservatively.
While lending is still a major DeFi sector, buzzier markets like onchain perpetuals have grabbed the spotlight, with Hyperliquid becoming the biggest DeFi project by market value.
Still, Aave’s TVL has almost doubled to $30 billion since April. Apart from TVL, the DeFi lender is also recording significant user activity.
Excluding stablecoin giants Tether and Circle, liquid staker Lido is the only protocol that generates more transaction fees on the Ethereum blockchain than Aave.
But the market might be beginning to stir for Aave.
The protocol’s P/S bottomed at 17x in August, its lowest level since 2021. Since then, it has more than doubled to its current level, even if it still lags many of its less vaunted rivals, for now.
