Aave has introduced a proposal to hardcode the price of Ethena’s USDe to Tether’s USDt, aiming to shield users from market price fluctuations. Co-authored by Chaos Labs and LlamaRisk, the proposal suggests linking USDe directly to USDt, aligning the price feeds to minimize risks during market volatility. The rationale includes preventing potential liquidation risks associated with a drop in USDe’s value, which could threaten over $300 million in USDe-backed loans. However, the proposal has faced criticism from the Aave community. Users expressed concerns about the appropriateness and risks of hardcoding USDe to USDt, questioning its implications for USDe’s nature as a stablecoin and the potential conflicts arising from the authors’ affiliations with Ethena. Detractors suggest exploring alternatives, like pegging directly to $1.00, to mitigate price variations entirely. As discussions continue, no formal vote has been scheduled yet on this proposal.

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