5 trends indicate the most undervalued Ethereum DeFi token is Aave’s LEND ๐จ This article is 4 years old...
5 trends indicate the most undervalued Ethereum DeFi token is Aave’s LEND
2 min read
Updated: Feb. 4, 2021 at 8:06 pm UTC
Photo by Martin Grincevschi on Unsplash
Coins in Ethereum’s decentralized finance (DeFi) space have seen parabolic growth over recent months that has easily outpaced every other financial market. No coin shows this as well as LEND โ the native token of the Aave protocol, formerly known as ETHLend.
Since the start of 2020, the coin has rallied over 5,000 percent, having started this year at under $0.01. LEND currently trades at $0.588 for further context.
Despite this parabolic growth trend that has thrust LEND into the crypto spotlight, some think that the Aave coin is still undervalued.
One financier in the space, in fact, went as far as to say that it may be the most undervalued coin in Ethereum DeFi.
Could Aave’s LEND be the most undervalued DeFi token?
Spencer Noon, head of DTC Capital, thinks that LEND may be the “most undervalued DeFi token today” for the following five fundamental trends:
- Outstanding debt, the aggregate value of all outstanding on-chain loans issued by Aave, has hit an all-time high.
- The number of unique lenders using Aave a day has hit an all-time high.
- $440 million worth of flash loan volume has been processed. A flash loan is an instant loan where users can borrow and return cryptocurrencies within the same block.
- Aave has topped the DeFi leaderboards as per DeFi Pulse.
- The market capitalization to total value locked in Aave ratio has hit 0.6, which indicates LEND is far undervalued compared to other protocols.
The fundamentals indicate $LEND might be the most undervalued #DeFi token today:
– ATHs outstanding debt
– ATHs unique lenders/day
– $440M flash loan vol
– Largest protocol @defipulse
– 0.6 Mcap/TVL ratioAll happening organically *without* liquidity mining/recursive leverage pic.twitter.com/VbQmsPFjDc
— Spencer Noon (@spencernoon) September 15, 2020
This is not the first time Noon has heavily thrown his weight behind the cryptocurrency and the underlying protocol.
As reported by CryptoSlate previously, Noon remarked to his followers that the fact that Aave has accrued so many users and so much locked value without liquidity mining incentives shows how valuable it is:
โOne of the best signals of PMF in #DeFi is if a project can succeed w/o extra incentives (liquidity mining). @AaveAave doesnโt have LM yet itโs still one of the biggest beneficiaries of new yield farming activity. At $1.26B TVL and only $759M mcapโthe fundamentals are so strong.โ
A new competitor on the scene?
LEND’s claim to fame as the most undervalued DeFi protocol may soon come under pressure though with the launch of Uniswap’s UNI token.
UNI is currently a coin with no value except for its ability to govern the Uniswap decentralized exchange. Analysts soon expect it, though, to become a coin that accrues value through dividends, which will be from the hundreds of millions of dollars worth of trades the exchange processes each day.
Crypto analyst Jack Purdy summed up Uniswap’s value proposition well with the following tweet on Sep. 16, which suggests that even at a $3 billion market capitalization (its around $400m now), Uniswap would still only trade at seven times its annualized revenue.
Even at a $3 billion mcap $UNI is still only valued at less than 7x annualized revenue
Taking its closest comp @BalancerLabs which is at 17.5x that would put $UNI at $7.5 ?
— Jack Purdy (@jpurd17) September 17, 2020
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Designed with simplicity in mind, the Uniswap protocol provides an interface for seamless exchange of ERC20 tokens on Ethereum.