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.