A new proposal has been introduced on the Aave platform that proposes to peg the price of Ethena’s USDe to Tether’s USDt. The proposal, jointly prepared by Chaos Labs and LlamaRisk, aims to protect Aave users from secondary market volatility.

USDe is a synthetic stablecoin backed by on-chain assets and derivatives, and is the third largest by market cap. The proposal states that a 5% drop in the USDe price could lead to a $300 million credit risk exposure in Aave.

The community is skeptical about this pegging proposal. Do you think this approach adequately addresses the risks? Share your thoughts in the comments.