E-Mode

E-Mode (Efficiency Mode) is a feature that enables higher capital efficiency when borrowing correlated assets. When you supply collateral and borrow an asset within the same risk category, the third-party protocol on WLFI Markets automatically applies a more favorable liquidation threshold.

Automatic activation

E-Mode activates automatically based on the assets in your position. There's no manual toggle - simply supply and borrow correlated assets to benefit from enhanced liquidation thresholds.

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How E-Mode works

Dolomite groups assets into risk categories based on their price correlation. When all assets in your position belong to the same category, the protocol applies optimized margin requirements.

Supported E-Mode categories

While Dolomite supports additional E-Mode categories across its deployments, WLFI Markets currently supports two modes:

1. Stablecoin E-Mode - For positions containing only USD-pegged stablecoins

2. Ethereum-correlated E-Mode - For positions containing only ETH and ETH-derivative assets

Default margin requirement

If no E-Mode is active, WLFI Markets uses the default margin requirement (117.65% / 85% liquidation threshold). Mixing assets from different categories in any position will cause the entire position to use the default margin requirement.

Mode	Assets	Margin requirement	Liquidation threshold
Stablecoin E-Mode	USD1, USDC, USDT	Lower	Higher
Ethereum-Correlated E-Mode	ETH	Lower	Higher

Example: Stablecoin E-Mode

If you supply USD1 as collateral and borrow USDT, both assets are stablecoins pegged to USD. Because their prices move together, the risk of liquidation due to price divergence is minimal. E-Mode recognizes this correlation and allows you to borrow more against your collateral.

If you then borrow ETH in the same position, the margin requirement automatically adjusts to the default rate since ETH is not correlated with stablecoins.

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Asset categories

WLFI Markets on Ethereum Mainnet supports the following asset categories for E-Mode:

Stablecoin E-Mode

Market ID	Asset	Description
1	USD1	World Liberty Financial's USD-backed stablecoin
2	USDC	Circle's USD Coin
5	USDT	Tether USD

Positions containing only stablecoins benefit from E-Mode's enhanced liquidation threshold. Borrowing one stablecoin against another stablecoin as collateral qualifies for this mode.

Ethereum-correlated E-Mode

Market ID	Asset	Description
0	ETH	Ethereum

Positions containing only ETH-correlated assets benefit from enhanced liquidation threshold.

Coming soon

For now, WLFI Markets only supports supplying ETH (which will be automatically wrapped to WETH) in this category. Additional ETH-derivative assets will be added in the future.

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Benefits of E-Mode

Benefit	Description
Higher Borrowing Power	Borrow more against your collateral when using correlated assets
Capital Efficiency	Optimize your positions without additional collateral
Automatic Application	No configuration needed—E-Mode applies based on your position composition
Flexible Positions	Add non-correlated assets anytime; the margin requirement adjusts automatically

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E-Mode and liquidation risk

Important

While E-Mode allows higher liquidation thresholds, it does not eliminate liquidation risk. Even correlated assets can experience temporary price divergence. Monitor your collateral ratio and maintain appropriate buffers.

When E-Mode is active, your liquidation threshold remains tied to the enhanced margin requirements. If your position's collateral ratio drops below 1.00, it becomes eligible for liquidation regardless of whether E-Mode is active.

Best practices

• Monitor your collateral ratio regularly, especially during periods of high market volatility

• Maintain a buffer above the minimum collateralization threshold

• Understand the assets in your position and their correlation dynamics

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Technical details

E-Mode is provided by Dolomite's Account Risk Override system. The protocol evaluates your position's composition on every transaction and applies the appropriate margin category automatically.

Mode	Minimum collateralization	Liquidation threshold
Default	117.65%	85%
Stablecoin E-Mode	Enhanced	Higher
Ethereum-Correlated E-Mode	Enhanced	Higher

For more technical information about risk parameters and margin calculations, visit the Dolomite Risk Management Documentation.