| Mode | Max LTV (%) | Liquidation threshold (%) |
|---|---|---|
| Standard | ||
| E-Mode |
Why E-Mode changes the math
Aave's standard risk parameters assume your collateral and debt assets can move independently of each other, so the max LTV and liquidation threshold are set conservatively. E-Mode narrows the collateral universe to assets Aave governance has classified as tightly correlated — same-peg stablecoins, or ETH and its liquid-staking derivatives — and raises both limits toward the correlation's expected bound. Formula: max borrow = collateral × LTV, and health factor = (collateral × liquidation threshold) / debt; liquidation triggers at HF < 1. The tradeoff this calculator isolates: E-Mode gives more usable leverage from the same collateral, but it also means a smaller break in the correlation (a depeg, or a liquid-staking token trading at a discount) burns through your safety buffer faster than the standard, lower-LTV limits would. See health factor calculator for the single-asset base case and multi-collateral health factor for baskets that mix categories.
How Aave E-Mode categories actually work
Aave V3, live since 2022, groups certain assets into "categories" — stablecoins, ETH-correlated, BTC-correlated, and others depending on the deployment — where every asset in the category can be expected to trade close to a fixed ratio against every other asset in it. When you opt into E-Mode for a category, Aave restricts what you can use as collateral and what you can borrow to assets inside that same category, and in exchange raises the loan-to-value and liquidation-threshold ceilings well above the standard, cross-asset limits. A stablecoin-to-stablecoin position that would cap out around 77-80% LTV under standard rules can often reach 97% LTV under E-Mode; an ETH-collateral loan against wstETH or rETH can move from roughly 80% to 93%.
The mechanism exists because most of Aave's liquidation-threshold conservatism is there to absorb the case where collateral and debt decouple — ETH crashes while your USDC debt stays flat, for example. Inside a correlated category that decoupling risk is much smaller by design, so Aave's risk team (via Chaos Labs and similar risk providers) can safely tighten the buffer and let borrowers extract far more capital efficiency from the same collateral, which is the whole point of the "Efficiency Mode" name.
The catch is that E-Mode doesn't remove risk, it concentrates it. A stablecoin that loses its peg, or a liquid-staking token that trades at a discount during a mass-unstaking event, breaks the exact assumption E-Mode is priced on — and because the LTV is so much closer to 100%, the health-factor cushion that would normally absorb that shock is thinner to begin with. This calculator's health-factor and liquidation-buffer output makes that tradeoff concrete: more borrow power, less room for the correlation to be wrong.