Aave Sparks Debate with Controversial Proposal on Stablecoin Pricing

A proposal submitted by Chaos Labs and LlamaRisk to Aave suggests pegging Ethena’s USDe stablecoin to Tether’s USDT to mitigate volatility risks.

The goal is to stabilize USDe’s value and prevent potential liquidation events that could affect over $300 million in loans on the platform.

While proponents argue the peg would safeguard users, critics question its effectiveness, suggesting deeper systemic issues remain unaddressed. Some community members propose pegging USDe directly to $1 for simplicity.

Aave, which manages $37 billion in total locked value, continues to expand into new markets, including BNB Chain and ZKsync Era.

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Meanwhile, Ethena outlined plans to integrate its sUSDe stablecoin into Telegram’s ecosystem, targeting the app’s 900 million users, and unveiled iUSDe, a product offering 10% yields.

Discussions on the proposal are ongoing, with no vote scheduled yet.

Alexander Zdravkov