Liquidity Market

Market Overview

Lending and eTokens

Users lend assets like ETH, USDC, or DAI on XLend.

In return, they receive eTokens, which represent their stake in the pool and accrue interest over time. eTokens can be transferred or traded.

Borrowing

Users can borrow assets by using their deposits as collateral. The Loan-to-Value (LTV) ratio determines how much can be borrowed against the collateral.

Health Factor

Liquidators monitor the health factor of each user’s position, which reflects the ratio of collateral to borrowed funds. If the health factor falls below a certain threshold, the position becomes at risk of liquidation.

Liquidation

If the collateral value drops too much, liquidators can buy the collateral at a discount to repay the loan. This helps keep the protocol solvent.

Advanced Features

• eMode (Efficiency Mode): Allows borrowers to increase borrowing power when collateral and borrow assets are closely correlated (e.g., stablecoins).

• Isolation Mode: Limits borrowing when new or volatile assets are used as collateral to reduce risk.

• Supply and Borrow Caps: Caps ensure that the protocol isn’t overly exposed to any single asset.

Security

XLend introduces multi-layered security through decentralized liquidation, staking, audits, and continuous risk monitoring to prevent insolvency.