Efficiency Mode

Maximize your capital efficiency for correlated assets!

E-Mode enhances capital efficiency by allowing higher loan-to-value (LTV) ratios for assets with correlated prices. It enables users to borrow more within designated asset categories while minimizing risk due to price correlation.

How E-mode Works

E-Mode categorizes assets with correlated prices, enabling higher borrowing power within the same group. When activated, users benefit from increased LTV ratios for assets in that category.

For instance, USD-pegged stablecoins like USDC and USDT typically fall under the same E-Mode category.

Key Features

Enhanced Borrowing Capacity

• Higher LTV ratios apply when both collateral and borrowed assets belong to the same E-Mode category.

Category-Specific Parameters

• E-Mode is defined per asset group (e.g., stablecoins, ETH-correlated assets), each with its own configuration.

Collateral Flexibility

• Assets outside the active E-Mode category remain usable as collateral under standard LTV and liquidation rules.

Using E-mode

Activation

• Users must manually enable E-Mode for a specific asset category. Activation requires repaying all existing debt outside the selected category.

Borrowing

• Once enabled, users can borrow assets within the category at elevated LTV ratios.

Risk Management

• Monitor the health factor closely, as higher leverage increases liquidation risk.

Example: Stablecoin E-mode

Let's consider a stablecoin E-mode category:

• You supply 10,000 USDC as collateral.

• E-mode is activated for the stablecoin category.

• The E-mode LTV for stablecoins is set to 97%.

In this scenario, you could borrow up to 9,700 USDC or USDT (97% of your collateral value), significantly higher than the standard LTV for these assets.

Risks and Considerations

Increased Leverage

• Higher LTV increases exposure; even correlated assets may experience price deviations, posing liquidation risk.

Category Constraints

• Borrowing is limited to assets within the selected E-Mode category.

Market Volatility

• Correlated assets can still diverge in price. Active monitoring and market awareness are essential.