Aave Community Proposes Hardcoding USDe Price to Match USDT

According to Odaily, the Aave community has introduced a new ARFC proposal to hardcode the price of Ethena's USDe to align with USDT in Aave's pricing feed. This proposal, co-authored by Chaos Labs and LlamaRisk, was submitted on January 3, aiming to shield Aave users from secondary market volatility. Notably, LlamaRisk is a member of Ethena's risk committee. The proposal suggests linking the value of USDe directly to USDT, ensuring seamless integration and preventing disruptions caused by temporary USDe price fluctuations. Aave currently utilizes Chainlink's USDe/USD price data to assess staked USDe (sUSDe), the staked version of USDe. Previously, it was reported that a 5% drop in USDe's price could risk liquidation of loans backed by over $300 million worth of USDe on Aave, potentially triggering collateral sell-offs to repay outstanding debts. The proposal has sparked skepticism among Aave users, who question whether this approach addresses the underlying risks. User Hazbobo expressed concerns, stating, "Since USDe is not truly intended to be a stablecoin, hardcoding its price to USDT seems risky. What are the extreme scenario risks involved? What is the worst-case scenario?" Another community member, ElliotNess, criticized the proposal for failing to address potential risk factors, describing it as a low-quality ARFC from two service providers without exploring any potential conflicts. ElliotNess questioned the rationale behind pegging USDe to USDT and suggested that if Aave plans to hardcode USDe's price, it might as well peg it directly to $1.00 to completely avoid secondary market price deviations. The proposal is currently in the early discussion phase and has not yet proceeded to a formal vote. Ethena Labs founder Guy Young shared a photo on X of discussions with Aave founder Stani, commenting, "Aavethena is a great proof of concept, and Arcthena will scale DeFi tenfold." In response to inquiries about the timeline, Guy indicated a timeframe of 1-3 months.