sUSDe and USDe Price Feed Update
Vote Result: YES
Rationale
This was an extremely difficult decision to make and we are still wary of hardcoding the USDT price to sUSDe and USDe’s price feeds. The two key reasons we decided to vote in favour of this proposal is because (1) USDe’s value is systemically correlated with USDT, with 84% of mints and redemptions of USDe via USDT and 76% of its hedging relying on USDT-denominated perpetuals and (2) a 5% drop in USDe’s secondary market price could cause significant liquidations which would likely cause Aave to incur bad debt, which could, in the worst cases, be avoided by hardcoding with USDT. From our angle, USDe is already tightly linked with USDT, and hardcoding the price to avoid liquidations and reflect the market dynamics is an acceptable trade-off.
However, we do see the counterpoints - USDe is explicitly not a stablecoin and hardcoding its price feed to that of USDT assumes that stability, which is not correct. We also think that other solutions, especially the hybrid oracle with a buffer mentioned by @stani, is the better solution in the medium term and this should be taken up by BGD Labs and Chainlink to develop.
All in all, this is a tricky proposal that we’ve voted YES for with reservations.