> For the complete documentation index, see [llms.txt](https://docs.intersectfi.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.intersectfi.com/guides/efficiency-mode.md).

# Efficiency Mode

High Efficiency Mode, or E-mode, is a powerful feature designed to maximize capital efficiency for users when dealing with assets that have correlated prices. This mode allows for higher loan-to-value (LTV) ratios, enabling users to borrow more against their collateral within specific asset categories.

### How E-mode Works

E-mode groups assets with correlated prices into categories. When activated, users can enjoy increased borrowing power for assets within the same category. For example, stablecoins like USDC and USDT are all pegged to USD and would typically be in the same E-mode category.

#### Key Features:

1. **Increased Borrowing Power**: Users can borrow more against their collateral when both the collateral and borrowed assets are in the same E-mode category.
2. **Category-Specific**: E-mode is applied on a per-category basis. Different categories (e.g., stablecoins, ETH-correlated assets) may have different E-mode parameters.
3. **Flexible Collateral Usage**: E-mode does not restrict the use of other assets as collateral. Assets outside the E-mode category can still be supplied with their standard LTV and liquidation parameters.

### Using E-mode

1. **Activation**: Users must manually activate E-mode for a specific category in their account settings. You must first repay all existing debts that are not in that selected category. 
2. **Borrowing**: Once activated, users can borrow assets within the same category at higher LTV ratios.
3. **Monitoring**: Keep an eye on your health factor, as E-mode allows for higher leverage.

### Example: Stablecoin E-mode

Let's consider a stablecoin E-mode category:

* You supply 10,000 USDC as collateral
* E-mode is activated for the stablecoin category
* The E-mode LTV for stablecoins is set to 97%

In this scenario, you could borrow up to 9,700 USDC or USDT (97% of your collateral value), significantly higher than the standard LTV for these assets.

### Risks and Considerations

* **Higher Leverage**: E-mode allows for higher borrowing power, and even though you are borrowing a correlated asset, price deviations can happen occasionally so monitor your positions closely.
* **Category Restrictions**: You can only borrow assets within the same E-mode category.
* **Market Fluctuations**: Even correlated assets can experience price divergence. Stay informed about market conditions.

###


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