Efficiency Mode (eMode)
Efficiency Mode (eMode)
The High Efficiency mode feature (or "eMode") is designed to maximise capital efficiency when collateral and borrowed assets are correlated in price.
The RISK_ADMINS
and POOL_ADMIN
, set by Aave Governance, can configure a maximum of 255 eMode categories, with each EModeCategory
having following risk management parameters:
LTV (Loan to value)
Liquidation threshold
Liquidation bonus
A custom price oracle (optional)
💡 Category 0 is reserved as the default non-eMode category. All the assets listed on Aave V3, by default have category 0 (which indicates the standard operational mode).
All Assets listed on Aave V3 can be set to any of the pre-configured eModeCategory
by the RISK_ADMINS
or POOL_ADMIN
.
The correct categorisation is not enforced on-chain and needs to be maintained by the RISK_ADMINS
and POOL_ADMINS
selected via the Aave Governance vote.
eMode also offers the possibility of introducing a specific price oracle for a certain category.
How it works?
If the user has supplied liquidity to the protocol, the user eMode
category is set to 0 by default.
The protocol allows user to set the user eMode category to any of the eModeCategories
configured by the PoolConfigurator
given the following conditions holds true:
all the borrowed assets of the user are in the chosen category.
changing eMode doesn’t leave user position under-collateralised
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