Grayscale: These 15 Profitable Crypto Protocols Are Severely Undervalued

Author: Zach Pandl (Head of Grayscale Research)

Translation & Compilation: TechFlow

TechFlow Summary: Grayscale Research has released its latest report listing the top 15 revenue-generating on-chain protocols and comparing their valuation multiples. The core 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 caps nearly equal to their annual revenue. Grayscale believes the CLARITY Act could pass as early as next month, potentially opening the door for institutional capital to flow into these DeFi financial protocols. However, note that Grayscale itself is a crypto asset management firm; its conclusion of “undervaluation” aligns with its commercial interests, and investors should conduct independent analysis.

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

Among the top 15 revenue-generating on-chain protocols—including Hyperliquid—most now trade at single-digit trailing-12-month revenue multiples, with many at just 1x. Given that most protocols incur minimal operating expenses, they appear equally inexpensive when measured by profit or cash flow.

Grayscale believes the potential passage of the CLARITY Act—as soon as next month—could help unlock this value. If enacted, the legislation would extend traditional finance’s regulatory framework to digital assets, representing a major tailwind for these applications.

Specifically, the CLARITY Act would accelerate growth in tokenized assets and on-chain finance. Nearly all of the top 15 revenue-generating protocols are tied directly to financial use cases—or closely related infrastructure such as oracles and staking. Grayscale expects these protocols to benefit significantly from the anticipated rise in on-chain transaction activity following the Act’s passage.

Grayscale’s “Bargain List”: A Protocol-by-Protocol Breakdown

Caption: Top 15 on-chain protocols ranked by revenue. Data as of June 24, 2026. Sources: DefiLlama, Artemis, Grayscale Investments. Projects with insufficient data coverage excluded. Chainlink omitted due to mixed on-chain and off-chain revenue streams.

This table packs dense information—here’s a layered breakdown.

The “1x Club”: Market Cap ≈ Annual Revenue

The most striking feature of the table is four protocols trading at precisely 1x revenue multiple:

Pump.fun (PUMP) — $459M in protocol revenue over the past 12 months, $456M circulating market cap. A software business generating nearly $500M annually with negligible operating costs—and valued at just one year’s revenue—would immediately attract value investors in traditional markets. Yet Pump.fun’s revenue relies heavily on meme coin speculation; trading volume could vanish instantly if sentiment shifts. Its 1x valuation may reflect market neglect of real cash flows—or the market correctly discounting unsustainable revenue.

PancakeSwap (CAKE) — $322M revenue, $425M market cap, 1x. The largest DEX on BNB Chain, with diversified revenue streams spanning AMM trading, liquidity mining, and prediction markets—more resilient than Pump.fun, backed by a stable Asia-Pacific user base.

Meteora (MET) — $62M revenue, $78M market cap, 1x. A Solana-based liquidity infrastructure project co-founded by Meow, founder of Jupiter. Note recent team risk: Ben Chow, Meteora’s co-founder, resigned amid allegations of financial misconduct.

Collector Crypt (CARDS) — $49M revenue, $68M market cap, 1x. A “consumer & culture”-focused protocol—the least well-known among the 15.

The Middle Tier: Single-Digit Multiples, Real DeFi Cash Flow

Raydium (RAY) — $46M revenue, $158M market cap, 3x. A core Solana AMM, benefiting from Solana ecosystem transaction volume and new token launches.

Lido Finance (LDO) — $77M revenue, $216M market cap, 3x. Ethereum’s largest liquid staking protocol—representing the “tools & services” category and on-chain staking infrastructure.

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

Sky (SKY) — $248M revenue, $1.241B market cap, 5x. Formerly MakerDAO—a leading on-chain lending and stablecoin protocol.

Jupiter (JUP) — $130M revenue, $716M market cap, 6x. Solana’s largest DEX aggregator, recently surpassing both Uniswap and PancakeSwap in daily fee revenue on multiple occasions.

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

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

Aave (AAVE) — $125M revenue, $1.169B market cap, 9x. The largest on-chain lending protocol. In another report, Grayscale conducted a detailed discounted cash flow (DCF) analysis of AAVE—a methodological breakthrough in crypto valuation, discussed further below.

The High-Multiple Tier: Paying for Narrative and Optionality

Hyperliquid (HYPE) — $871M revenue, the highest on the list, with a $13.456B circulating market cap—15x. Its revenue dwarfs the second-place protocol, yet its valuation multiple remains elevated. Hyperliquid’s story extends beyond being a perpetuals exchange: Its HIP-3 proposal, launched in October 2025, enables third parties to deploy permissionless perpetuals markets on Hyperliquid, expanding underlying assets to equities, commodities, indices, and pre-IPO stocks. In March, S&P Dow Jones Indices licensed the S&P 500 Index to a HIP-3 deployer, launching the first-ever S&P 500 perpetuals product. Peak open interest across HIP-3 markets reached $3.2B, with cumulative volume approaching $200B. 99% of protocol fees are returned via buybacks. Grayscale has already launched an NASDAQ-listed staking ETF for HYPE (HYPG).

World Liberty Financial (WLFI) — $105M revenue, $1.82B market cap, 17x. Valuation appears stretched—driven more by political association with the Trump family and market visibility than fundamentals.

Uniswap (UNI) — $49M revenue, $1.778B market cap, 37x. Second-lowest on the revenue ranking, yet highest on valuation multiples. This reflects a long-standing structural issue: UNI holders pay a premium primarily for governance rights and the optionality of the “fee switch”—the ability to redirect protocol revenue to token holders—not for current cash flow. Markets price UNI for what it *could become*, not what it *is today*.

CLARITY Act: The Catalyst for These Protocols

Grayscale’s thesis isn’t simply “these protocols are cheap”—it’s “they’re cheap *ahead of a regulatory catalyst*.”

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

The law’s core objective is to clarify jurisdictional boundaries between the SEC and CFTC and establish a framework distinguishing “investment contracts” from “digital commodities.” It passed the Senate Banking Committee 15–9 (including two Democratic votes); Polymarket assigns a 67% probability of passage this year.

The logic chain is straightforward: clear regulation → reduced institutional compliance friction → increased on-chain activity and TVL → higher protocol revenues → re-rating of today’s low valuation multiples.

[Translator’s Note] Grayscale’s DCF Valuation of AAVE: One-Year Target Price of $175

The following content is drawn from Grayscale’s mid-June companion report, “Guide to Buying the Dip: Valuing Crypto with Cash Flows,” and is added here by the translator—not part of the original article.

Grayscale places crypto assets along a valuation spectrum: at one end sit pure commodity-like assets such as Bitcoin, priced by supply and demand; at the other, protocols like Hyperliquid and Aave—with substantial revenue—fit traditional discounted cash flow (DCF) models.

Framework for valuing Aave:

Aave Labs functions essentially as a permissionless on-chain bank, earning spreads between depositors and borrowers, plus fees and GHO stablecoin revenue. Grayscale forecasts ~$60M in Aave protocol profit for 2026, with an operating margin of ~50%.

Applying fintech comparables (20–25x P/E), AAVE’s fair value falls between $80–$100; at the time of the report’s publication, it traded near $75. AAVE’s forward P/E stood at ~18x—below comparable fintech firms.

In a base-case scenario (accelerated tokenization adoption + regulatory clarity), Grayscale sets a one-year target price of ~$175—roughly a 130% upside from current levels.

Valuing crypto protocols introduces unique considerations absent from traditional tools:

Divergent token value accrual mechanisms — buybacks (AAVE), token burns (HYPE), fee rebates (CoW), staking rewards (CRV)—each delivers value to holders with differing efficiency.

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

Legal structure uncertainty — holding governance tokens typically confers no legally enforceable claim on protocol assets. DAOs employ varied legal structures to align protocol operations with applicable law.

[Translator’s Note] Macro Context: Market Divergence Since the Iran War

The following is excerpted from Grayscale’s contemporaneous weekly report, providing macro context.

Since the Iran war erupted in late February, U.S. equities rose 9% (boosted by AI-related spending), Bitcoin fell 1%, and gold dropped 20%. BTC and gold underperformed partly because markets anticipate Fed rate hikes to combat inflation—one-year federal funds rate expectations have risen ~60 bps, and roughly half of Fed officials view a 2026 rate hike as appropriate. The ECB has already hiked rates.

Grayscale disagrees with this outlook; its base case assumes the Fed holds rates steady. If correct, BTC could rally to catch up with equities.

In this risk-off macro environment, on-chain protocol valuations have been further compressed—creating the precise timing window for Grayscale’s “bear-market multiples + regulatory catalyst” thesis.

How to Objectively Assess This Report

Grayscale’s picture is indeed compelling: high-margin protocols trading at compressed multiples, a plausible regulatory tailwind looming, and broad market risk aversion. This represents a rare, fundamentally grounded crypto investment thesis in a market typically driven by sentiment.

Yet two points must be stated clearly:

First, the catalyst is conditional. The CLARITY Act’s timeline and final form remain uncertain. Any investment thesis built around legislative events inherently carries risk of delay—or disappointment. A 67% passage probability implies a 33% chance of failure.

Second, Grayscale is a stakeholder. As a crypto asset management firm, its business model depends on investors increasing exposure to these assets. It has already launched a Nasdaq-listed staking ETF for Hyperliquid. Its conclusion that “now is an attractive entry point” must therefore be read within this conflict-of-interest context—not as neutral analysis.

The valuation data is verifiable; the anomalies are real. But whether they signal a bottom—or whether the market is correctly pricing known risks—is a question every investor must answer independently.

For those tracking the CLARITY Act, watch not only whether the bill passes—but whether institutional capital actually flows into these protocols in the weeks thereafter. That will be the true validation of Grayscale’s thesis.