Efficiency Mode

Efficiency Mode (E-Mode) is a specialized borrowing configuration designed for assets with high price correlation. When enabled, users can access significantly higher Loan-to-Value (LTV) ratios compared to standard mode, enabling more capital-efficient looping and leverage strategies.

How E-Mode Works

Standard borrowing mode treats all assets independently, applying conservative LTV limits to account for price volatility between unrelated collateral and debt assets. E-Mode recognizes that certain asset pairs move together (such as ETH and LSTs, or USDC and tokenized treasuries/yield-bearing stablecoins), reducing liquidation risk through correlation rather than over-collateralization.

Standard Mode

  • 1.Max LTV: 75-80%
  • 2.Liquidation threshold: 80-85%
  • 3.Cross-asset borrowing allowed
  • 4.Conservative risk parameters

Efficiency Mode

  1. 1.Max LTV: Up to 97%
  2. 2.Liquidation threshold: 98-99%
  3. 3.Restricted to correlated asset pairs
  4. 4.Optimized for looping strategies

Supported E-Mode Categories

ETH Correlated

Deposit ETH LSTs or LRTs and borrow WETH.

Examples:wstETHwrETHweETHwzETHWETH

Stablecoin Correlated

Deposit yield-bearing stablecoins and borrow USDC/USDT with minimal liquidation risk.

Examples:sUSDeUSDTUSDCsUSDai

Step-by-Step: Enabling E-Mode

  1. 1.Access the ZonaLend dashboard. Navigate to the "Efficiency Mode" tab or toggle in the borrowing interface.
  2. 2.Review available E-Mode categories. Select the category matching your collateral type (e.g., "ETH Correlated" for wstETH).
  3. 3.Enable E-Mode for your position. Confirm the mode switch. Your existing deposits will be re-evaluated under E-Mode parameters if eligible.
  4. 4.Borrow at enhanced LTV. With E-Mode active, your borrowing power increases significantly for correlated asset pairs within the same category.
  5. 5.Monitor with adjusted thresholds. Note that liquidation thresholds are also higher.

E-Mode Restrictions

When E-Mode is enabled, you can only borrow assets within the same correlated category. Attempting to borrow uncorrelated assets (e.g., borrowing USDC against wstETH in ETH E-Mode) will either fail or automatically disable E-Mode for that position, reverting to standard LTV limits. Plan your strategy accordingly.

E-mode is ideal for:

  • 1.Delta-neutral looping strategies (e.g., wstETH/WETH)
  • 2.Maximizing yield on correlated stable pairs
  • 3.Reducing liquidation risk in predictable price ranges

Avoid E-mode when:

  • 1.Anticipating high volatility or depeg events