Vaidya Pallasena, director of ratings at stablecoin rating agency Bluechip, believes that Aave DAO passed two snapshot proposals last week, partly to help GHO achieve its expected goal of being pegged to the U.S. dollar, but both plans are destined to fail.
Pallasena said: In its current form, GHO cannot maintain its peg, and the peg problem can only be solved by allowing users to exchange GHO for their underlying collateral, allowing arbitrage to drive the price to $1.
Pallasena believes that promoting arbitrage is the best approach, i.e. Aave should enable users to exchange GHO for collateral to exchange $0.98 for $1, pushing the peg back to $1.