# E-Mode

### Overview

E-Mode (Efficiency Mode) in XLend is designed to optimize capital efficiency when borrowing and supplying assets that are highly correlated. By enabling E-Mode, users can access higher LTV ratios and lower liquidation thresholds, allowing for more effective leverage strategies.

### How E-Mode Works

* When users enable E-Mode, they can only borrow assets within the same category (e.g., ETH-based assets or stablecoins).
* Borrowing power is significantly increased due to the lower risk associated with highly correlated assets.

### E-Mode Categories

XLend introduces asset categories for E-Mode, which include:

1. **ETH Category**: Includes ETH and Liquid Staking Tokens (LSTs) like wstETH, rETH, and stETH.
2. **Stablecoin Category**: Includes USDC, USDT, DAI, and other stablecoins.

### Key Benefits

* **Higher LTV Ratios**: Allows users to borrow a greater percentage of their collateralized assets.
* **Higher Liquidation Thresholds**: More efficient capital allocation without significantly increasing risk.

### Example Use Case

**ETH E-Mode Scenario:**

1. A user deposits 10 wstETH as collateral.
2. Enables E-Mode under the "ETH" category.
3. Borrows up to 9.3 ETH instead of the standard \~7 ETH without E-Mode.
4. Uses borrowed ETH for staking, liquidity provision, or leveraged yield farming.

### Considerations and Risks

* **E-Mode is Category-Locked**: Only assets within the selected category can be borrowed while E-Mode is enabled.
* **Higher Leverage = Higher Risk**: Liquidations can happen faster if the market moves unfavorably.
* **Not All Assets Support E-Mode**: Ensure the desired assets are part of an E-Mode category before activation.

### How to Enable E-Mode

1. Navigate to the "Borrow/Lend" page.
2. Click on "Enable E-Mode" on your position.
3. Select the asset category you want to use.
4. Supply and borrow assets within that category to maximize efficiency.


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