In the latest crypto news, banking giant Standard Chartered has initiated coverage of Aave. At the same time, it made one of the most bullish forecasts seen for a major decentralized finance protocol.
In a research note, Geoffrey Kendrick, the bank’s Global Head of Digital Assets Research, said AAVE could surge to $3,500 by the end of 2030. The target implies roughly 50x upside from current levels at $76.14. It also reflects the bank’s growing confidence in the long-term recovery of decentralized finance.
Standard Chartered Sees Major Upside for Aave
The forecast comes from Standard Chartered’s broader expectation that decentralized finance will grow substantially over the next several years. The bank recently projected that assets actively deployed within DeFi protocols could expand 37-fold to approximately $2.7 trillion by 2030. It expects stablecoins and tokenized real-world assets to drive much of that growth as they increasingly move on-chain.
Kendrick believes Aave is particularly well-positioned to benefit from that trend due to its dominant role in decentralized lending. Deposits drive lending activity, lending activity generates fees, and those fees ultimately support the protocol’s value. Approximately 90% of Aave’s fee generation comes from net interest margins. Meanwhile, the protocol has maintained a relatively stable loan-to-value ratio near 40% over the past two years.
The bank outlined a gradual appreciation path for the token. It forecasts AAVE could reach $180 by the end of 2026, $600 by 2027, $1,200 by 2028, $2,200 by 2029, and ultimately $3,500 by 2030. Standard Chartered also expects AAVE to outperform both Bitcoin and Ethereum over the same period.
Recovery, Tokenization, and Buybacks Could Drive Growth
Kendrick’s report arrives just months after the KelpDAO exploit that rattled the DeFi lending sector. During the incident, attackers drained approximately $292 million in rsETH through a LayerZero-powered bridge before depositing the funds as collateral on Aave. Following the exploit, Aave’s deposits fell from roughly $44 billion to $23 billion, while active loans declined from $18 billion to $9.5 billion.
Despite the setback, Standard Chartered views those figures as a cyclical low rather than evidence of structural weakness. The bank noted that deposits and lending activity have begun to stabilize. It pointed to comments from Aave founder Stani Kulechov regarding a new risk management framework currently undergoing governance review.
Beyond recovery, Kendrick identified tokenization as Aave’s largest long-term growth catalyst. The bank expects stablecoin supply to grow from approximately $310 billion today to $2 trillion by 2028, while a larger share of tokenized assets becomes integrated into DeFi applications. Aave Horizon, the protocol’s permissioned lending platform for tokenized real-world assets, could play a central role in that transition.
The report also highlighted Aave’s V4 security upgrade, growing GHO stablecoin ecosystem, and the eventual return of token buybacks as additional drivers. Before being paused following the KelpDAO exploit, Aave’s buyback program had already repurchased approximately 205,000 AAVE tokens, representing about 1.3% of its total supply.
Temitope Olajide
