ARK Invest's Digital Asset Research Director Lorenzo Valente posted on X platform, describing a special corner of the crypto market as a "graveyard". He noted that this graveyard is littered with quality protocols that were once highly sought after, but their token prices have plummeted 70%, 80%, or even 90% from all-time highs. Yet, these protocols have not ceased operations—they continue to generate transaction fees, maintain steady user growth, and hold leading positions in their respective niches.
Valente provided specific data to back his claim. On price-to-earnings ratios: the decentralized lending protocol Aave trades at only 9 times, the high-performance blockchain Solana at 12 times, and Ethereum at 17 times. Notably, Solana also holds a massive $6 billion in free cash flow in its treasury, signaling strong financial reserves. Ethereum, despite being labeled a "has-been asset" by some market participants, sports a 17 times P/E that is not high compared to traditional tech stocks.
Two other examples further reveal pockets of value. The decentralized exchange Uniswap trades at an EBITDA multiple of just 8 times, while its on-chain influence extends to roughly 2 billion users. Avalanche (AVAX) is trading below the liquidation value of its own treasury, meaning the market's pricing of the blockchain is lower than the net value of its liquidatable assets. The core businesses of these protocols have not materially shrunk; instead, they exhibit stable cash flow generation capability, merely having temporarily lost market attention.
Contrarian Investing: Steering Away from Hype Toward Unloved Assets
Valente further analyzed that many of these protocols were venture capital darlings in 2021, but are now market orphans. He warned investors that instead of chasing hot assets like Hype and Near, greater opportunity lies in those fallen into the "ruins zone." He wrote: "You don't get rich by buying hot assets—you get rich by buying assets that are temporarily out of favor but whose fundamentals remain intact." This fundamentals-based contrarian thinking stands out especially in a market dominated by sentiment-driven trading.
From a macro market perspective, short-term hotspots rotate too quickly, and capital rapidly enters and exits narratives, causing many infrastructure protocols with long-term building capabilities to be ignored. Valente's remarks serve as a wake-up call: projects that can maintain operational resilience after deep pullbacks are precisely the truly undervalued asset group. For investors seeking long-term value, such a "graveyard" harbors the early opportunities of the next cycle.