Ideas don't need a pulse.

Aave is the largest, most battle-tested borrowing & lending protocol

As the indisputable leader in the onchain lending & borrowing category with an extremely defensible and sticky moat, we think Aave is extremely undervalued as a category leader in one of the most important sectors of crypto and has substantial growth ahead that the market hasn’t caught up to.

Aave launched on Ethereum mainnet in Jan 2020, making this year its 5th year in operations. It has since established itself as one of the most battle-tested protocols across DeFi and the lending/borrowing sector. As a testament to this, Aave is currently the largest borrow/lend protocol at $7.5b of active loans, 5x the quantum of the second largest protocol - Spark.

Thesis

Unlike prior cycles—when there were Alt Seasons, and almost every token rallied on thin narratives or no fundamentals—the market now rewards two extremes:

• Cash‑flow‑rich tokens with clear product–market fit
• Zero‑utility, pure‑attention assets (memecoins)

Thanks to Lai Yuen for providing access to data, reviewing this report and providing valuable feedback. All information presented is accurate to the best of my knowledge and this report was written purely for educational purposes. As always, DYOR and ape responsibly!

This report was written on my own volition for bidclub.io and I was not compensated in any way by the Shuffle team or any related parties for writing this report. I am not an employee, consultant or advisor to Shuffle and have never received any form of compensation from Shuffle. As a disclosure, I hold investments in $SHFL, $BTC, $HYPE, $AAVE and other assets not mentioned in this report. I do not hold short positions in any assets mentioned. All data presented in this report is as of April 25th 2025, unless noted otherwise.

As someone who loves sports betting and is an active liquid token investor, the Shuffle platform and $SHFL token have been on my radar for over a year. Candidly, I am not a seed investor, missed both the first airdrop and LBP. I began building a liquid position approximately 1 year ago and have added to the investment several times since. As of April 25th 2025, $SHFL trades within ~10% of my cost basis. 

Key Points

• TVL Surge: Euler Protocol rebounded from a 2023 hack to $1.18B TVL, driven by modular lending and curator-led markets.
• Structural Edge: Offers 1-2% higher yields than Aave and up to 20% higher LTVs, potentially sustaining TVL growth.
• Growth Potential: EulerSwap and Euler Earn could drive TVL to $3-4B in 6-12 months, with 1-3x higher take rates (2-6% vs. 1-2% industry norm).

TL;DR

• Set‑up: Aave is the scale leader in on‑chain lending with $64.9B TVL, $27.1B borrowed, and $144M annualized protocol revenue; borrowers pay ~3.8% gross, of which ~14% accrues to the DAO (~53 bps NIM on loans).
• Upside levers (3 “real options”):
• Capital return: buybacks $1M/week (≈$52M/yr ≈ ~1.1% of mkt cap) funding “Umbrella” insurance & staking; management open to incentives/experiments and potential burns later. (Aave)