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:
ETH Category: Includes ETH and Liquid Staking Tokens (LSTs) like wstETH, rETH, and stETH.
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:
A user deposits 10 wstETH as collateral.
Enables E-Mode under the "ETH" category.
Borrows up to 9.3 ETH instead of the standard ~7 ETH without E-Mode.
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
Navigate to the "Borrow/Lend" page.
Click on "Enable E-Mode" on your position.
Select the asset category you want to use.
Supply and borrow assets within that category to maximize efficiency.
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