Grayscale Identifies 15 Undervalued Crypto Protocols with High Revenue

Author: Zach Pandl (Head of Grayscale Research)

DeepChain TechFlow

DeepChain Summary: Grayscale Research has released a new report ranking the top 15 on-chain protocol revenues and comparing their valuation multiples. The key finding is that numerous protocols generating hundreds of millions of dollars in annual revenue are trading at single-digit or even 1x revenue multiples—Pump.fun, PancakeSwap, and Meteora each have market capitalizations nearly equal to their annual revenue. Grayscale believes the CLARITY Act may pass next month, potentially opening institutional capital flows to these DeFi financial protocols. However, note that Grayscale itself is a crypto asset management firm, and its "undervalued" conclusion aligns with its business interests; investors should make independent judgments.

After a prolonged bear market, many revenue-generating on-chain applications are fundamentally quite cheap.

Among the top 15 on-chain protocol revenue generators (including Hyperliquid), the revenue multiples for the past 12 months have largely declined to single digits, with many now at just 1x. Since most protocols have low operating expenses, they appear equally inexpensive when measured by profit or cash flow.

Grayscale believes that the potential passage of the CLARITY Act—as soon as next month—could unlock this value. The reason: if enacted, the law would bring traditional financial regulatory frameworks to crypto assets, representing a major benefit for these applications.

Specifically, the CLARITY Act will drive growth in tokenized assets and on-chain finance. The top 15 revenue-generating protocols are almost entirely tied to financial use cases or closely related infrastructure, such as oracles and staking. Grayscale believes these protocols will significantly benefit from the anticipated increase in on-chain transaction activity following the passage of the CLARITY Act.

Caption: Top 15 blockchain protocol revenues by income. Data as of June 24, 2026. Sources: DefiLlama, Artemis, Grayscale Investments. Projects with insufficient data coverage are excluded. Chainlink is excluded due to having both on-chain and off-chain revenues.

This table has high information density; below is a step-by-step breakdown.

The most notable entries in the table are four protocols with a Revenue Multiple of only 1x:

Pump.fun (PUMP) — generated $459 million in protocol revenue over the past 12 months, with a circulating market cap of $456 million. A software business earning nearly $500 million annually with minimal operating costs, valued at just one year’s revenue, would immediately attract value investors in traditional markets. However, Pump.fun’s revenue is heavily dependent on meme coin speculation, and this trading volume could vanish instantly if sentiment shifts. A 1x valuation could reflect the market overlooking genuine cash flows—or it could reflect the market correctly discounting unsustainable revenue.

PancakeSwap (CAKE) — $322 million in revenue, $425 million market cap, 1x. The largest DEX on BNB Chain, with diversified business lines including AMM trading, liquidity mining, and prediction markets, offering more varied revenue streams than Pump.fun and a strong user base in Asia-Pacific.

Meteora (MET) — $62 million in revenue, $78 million market cap, 1x. A liquidity infrastructure on Solana, co-founded by Meow, the founder of Jupiter. Note the team risk stemming from the prior resignation of Meteora’s co-founder Ben Chow amid allegations of financial misconduct.

Collector Crypt (CARDS) — $49 million in revenue, $68 million market cap, 1x. Part of the "Consumer & Culture" category, with the lowest awareness among 15 protocols.

Raydium (RAY) — $46 million in revenue, $158 million market cap, 3x. A core AMM on Solana, benefiting from trading activity and new token launches within the Solana ecosystem.

Lido Finance (LDO) — $77 million in revenue, $216 million market cap, 3x. The largest liquid staking protocol on Ethereum, representing on-chain staking infrastructure in the "Tools & Services" category.

Aerodrome (AERO) — $124 million in revenue, $471 million market cap, 4x. The largest DEX on Base by TVL and trading volume, featuring a ve(3,3) tokenomics model with concentrated liquidity, serving as the liquidity hub for Coinbase’s L2 ecosystem.

Sky (SKY) — $248 million in revenue, $1.241 billion market cap, 5x. Formerly MakerDAO, a blockchain-based lending and stablecoin protocol.

Jupiter (JUP) — $130 million in revenue, $716 million market cap, 6x. The largest DEX aggregator on Solana, recently surpassing Uniswap and PancakeSwap multiple times in daily fee revenue.

Ether.fi (ETHFI) — $56 million in revenue, $314 million market cap, 6x. A leading protocol in the restaking sector.

Lighter (LIT) — $50 million in revenue, $381 million market cap, 8x.

Aave (AAVE) — $125 million in revenue, $1.169 billion market cap, 9x. The largest on-chain lending protocol; Grayscale provided a detailed DCF (discounted cash flow) analysis of AAVE in another report, marking a methodological breakthrough in the crypto industry, as discussed in detail below.

Hyperliquid (HYPE) — Ranked first with $871 million in revenue, a circulating market cap of $13.456 billion, and a 15x multiple. Its revenue scale far exceeds that of the second-place competitor, yet its valuation multiple remains substantial. Hyperliquid’s story extends beyond a perpetuals exchange: the HIP-3 proposal, launched in October 2025, enables third parties to deploy perpetual markets on Hyperliquid without permission, expanding underlying assets to include stocks, commodities, indices, and pre-IPO shares. In March this year, S&P Dow Jones Indices granted authorization to a HIP-3 deployer for the S&P 500 index, creating the first S&P 500 perpetual contract product. Peak open interest on HIP-3 markets reached $3.2 billion, with cumulative trading volume totaling approximately $200 billion. 99% of protocol fees are recycled back into the protocol via buybacks. Grayscale has launched HYPG, a Nasdaq-listed staking ETF for HYPE.

World Liberty Financial (WLFI) — $105 million in revenue, $1.82 billion market cap, 17x multiple. The valuation is clearly elevated, reflecting more its political association with the Trump family and market visibility than fundamental performance.

Uniswap (UNI) — $490 million in revenue, $17.78 billion market cap, 37x multiple. It has the second-lowest revenue ranking but the highest valuation multiple on the table. This reflects a long-standing structural issue: the premium paid by UNI holders is primarily for governance rights and the option value of a "fee switch" (allocating protocol revenue to token holders), not for current cash flows. The market is pricing UNI based on what it could become, not what it is today.

Grayscale's argument is not just that "these protocols are cheap," but that "they are cheap before a regulatory catalyst arrives."

Of the 15 protocols listed, 12 are financial protocols: decentralized exchanges, lending platforms, liquid staking, and yield infrastructure. The CLARITY Act (full name: Digital Asset Market Clarity Act) is a regulatory framework specifically targeting these financial use cases.

The core of this law is to define the jurisdictional boundaries between the SEC and the CFTC and establish a framework for distinguishing between "investment contracts" and "digital commodities." It passed the Senate Banking Committee by a vote of 15:9 (with 2 Democratic votes), and Polymarket assigns a 67% probability of passage within the year.

The logic chain is straightforward: clear regulatory rules → reduced compliance friction for institutions → growth in on-chain activity and TVL → increased revenue for these protocols → current low valuation multiples get re-priced.

The following content is from Grayscale’s accompanying research report, “Guide to Buying the Dip: Valuing Crypto with Cash Flows,” released in mid-June, and is not part of the original text; it has been supplemented and consolidated by the translator.

Grayscale places crypto assets on a valuation spectrum: one end consists of pure commodity-like assets such as Bitcoin, priced by supply and demand; the other end includes protocols like Hyperliquid and Aave with significant revenue, which are suitable for traditional discounted cash flow (DCF) models.

Analysis framework for Aave:

Aave Labs essentially operates like an permissionless on-chain bank, earning the spread between depositors and borrowers, plus fees and stablecoin (GHO) revenue. Grayscale expects Aave’s protocol profit to reach approximately $60 million in 2026, with an operating margin of around 50%.

Using comparable valuation multiples from fintech companies (20–25x P/E), AAVE’s fair value is approximately $80–$100, while its current trading price is around $75 as of the report’s publication. AAVE’s current forward P/E is approximately 18x, below that of comparable fintech companies.

Under the base case scenario (accelerated tokenization adoption and clearer regulation), Grayscale forecasts a one-year target price of approximately $175, representing a roughly 130% increase from current levels.

There are several unique issues with valuing cryptographic protocols that traditional tools do not address:

Token value recycling mechanisms vary—buybacks (AAVE), token burns (HYPE), fee rebates (CoW), and staking rewards (CRV)—each with different efficiency in transmitting value to holders.

Special expense items—including supply-side costs (payments to liquidity providers), token emissions (ongoing inflationary dilution), and DAO capital expenditures.

Legal structure uncertainty — Holding governance tokens typically does not confer legally enforceable rights over the protocol’s assets. Different DAOs use varying legal structures to align protocol operations with applicable laws.

The following content is from Grayscale's weekly report, providing macro context.

Since the outbreak of the war in Iran at the end of February, U.S. stocks have risen 9% (supported by AI spending), Bitcoin has declined 1%, and gold has fallen 20%. Part of the underperformance of BTC and gold stems from market expectations that the Federal Reserve may raise interest rates to combat inflation—the one-year federal funds rate expectation has increased by approximately 60 basis points, with about half of Fed officials viewing a rate hike in 2026 as appropriate. The European Central Bank has already raised rates.

Grayscale disagrees with this expectation; the base case is that the Fed will hold steady. If this assessment is correct, BTC's price may catch up to U.S. equities.

In this risk-off macro environment, valuations of on-chain protocols have been further compressed, creating a window of opportunity for Grayscale’s “bear market multiple + regulatory catalyst” thesis.

Grayscale’s depiction is indeed noteworthy: high-margin protocols trading at compressed valuation multiples, a potential regulatory tailwind on the horizon, and an overall market still in risk-off mode. This is a rare, fundamentals-based crypto investment thesis in a market typically driven by sentiment.

But two things must be clarified:

First, the catalyst is conditional. The timeline and final form of the CLARITY Act are not guaranteed. An investment thesis based on a legislative event inherently carries the risk of delay or disappointment. A 67% chance of passage also means a 33% chance of failure.

Second, Grayscale is a stakeholder. It is a cryptocurrency asset management firm whose business model is built on increasing investor exposure to these assets. It has launched a Nasdaq-listed staking ETF for Hyperliquid. Its conclusion that “now is an attractive entry point” should be interpreted within this context of interest, rather than as neutral analysis.

The valuation data is verifiable, and the anomalies are real. But whether this signals a bottom or whether the market is correctly pricing in the risks it sees is a question each investor must answer for themselves.

For those tracking the CLARITY Act, the key signal isn’t just whether the bill passes, but whether institutional funds actually flow into these protocols in the weeks following its passage—that’s the true validation of Grayscale’s argument.