Efficiency Mode

What is E-Mode?

E-Mode stands for Efficiency Mode.

It is an account-wide risk mode that groups highly correlated assets into a single borrowing and collateral basket. When your account uses a compatible category, Neverland can apply higher capital efficiency than the default per-asset configuration.

In practice, E-Mode can let you:

borrow more efficiently against correlated assets use a tighter collateral model for assets that usually move together unlock collateral usage for assets that may not be collateral-efficient in Default Mode

Important: E-Mode is not asset-by-asset. It applies to your whole account for the market. You can only be in one E-Mode category at a time, or in Default Mode.

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Available E-Mode Categories

Category	ID	Supply	Borrow	LTV	LT	LP
Liquid Staking Tokens	1	WMON sMON shMON gMON	WMON	88%	90%	5%
Stablecoins	2	USDC USDT0 AUSD	USDC USDT0 AUSD	93%	94%	4%

Default Mode

Default Mode is the normal market configuration where each reserve uses its own native collateral and borrowing rules.

Default Mode does not use a category-wide correlated basket.

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How E-Mode Works

When you enable an E-Mode category:

1. Your account switches from reserve-native rules to the selected correlated category.

2. Assets inside that category can receive the category's boosted collateral treatment.

3. Borrowing compatibility is checked against the category's allowed borrow basket.

4. The change affects the entire account, not only the asset you clicked.

When you return to Default Mode:

1. The account leaves the correlated category.

2. Category-wide boosts are removed.

3. Every reserve goes back to its own native market parameters.

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What Changes When You Enable E-Mode?

Depending on the category and your current positions, E-Mode can change:

which supplied assets count efficiently as collateral the effective LTV used for correlated assets the effective liquidation threshold used for correlated assets which borrowed assets are compatible with your current mode your projected health factor

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What Neverland Checks Before Allowing a Switch

Neverland blocks unsafe or incompatible E-Mode changes before transaction submission.

1. Incompatible Borrows

If you already have debt in an asset that does not belong to the target category's borrow basket, the switch is blocked.

Example:

you want to switch into Stablecoins your account still has an active WMON borrow

Result:

the switch is blocked until that incompatible debt is repaid

2. Zero-LTV or Disabled Collateral After Switch

If assets you currently use as collateral would become unusable or effectively zero-LTV under the target mode, the switch is blocked.

Result:

you must disable or remove that conflicting collateral first

3. Health Factor Safety Margin

If the projected post-switch health factor would fall below 1.01, Neverland blocks the switch.

Result:

the transaction is not allowed through the app the UI explains that the switch would drop the account below the safety margin

Note: If your account has no borrows, health factor does not provide meaningful additional signal, so the app focuses on the mode summary instead of a risk change.

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How E-Mode Affects Borrowing

If you are already inside an E-Mode category, borrowing is only allowed for assets that are borrow-enabled inside that active category.

This means:

being in Stablecoins can block non-stable borrowing being in Liquid Staking Tokens can block non-LST borrowing returning to Default Mode removes the category-wide borrow basket and falls back to reserve-native rules

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How E-Mode Affects Collateral

E-Mode can also change whether a reserve is practically usable as collateral for your account.

This is especially important for assets whose collateral usefulness depends on the active correlated basket.

If an asset requires E-Mode to be efficient as collateral

Neverland will tell you to enable a compatible E-Mode first.

If you try to toggle collateral directly

The collateral change modal does not change your account's E-Mode for you. It only changes collateral usage inside your current mode.

If a different E-Mode is required, the app routes you to Manage E-Mode instead.

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Supply & E-Mode Behavior

On supply flows, Neverland can require an E-Mode change before executing the supply with the intended collateral setup.

Current behavior on Neverland:

the app performs the E-Mode switch first then it submits the supply transaction this is intentionally handled as a two-step chained flow, not as a single bundled multicall

Why this matters:

it is more reliable for the current Neverland/Monad setup it avoids fragile bundled transaction behavior the app skips unnecessary E-Mode transactions if the account is already in the target category

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Manage E-Mode UI

The E-Mode entry point changes depending on your current state.

If E-Mode is disabled

The button shows:

Enable E-Mode

If E-Mode is active

The button shows:

Manage E-Mode: {Active Category}

Inside the Manage E-Mode modal, Neverland shows:

the current mode the selected next mode the category collateral basket the category borrow basket projected health factor changes, when relevant safety blocks for incompatible switches

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Practical Examples

Example 1: Enabling Stablecoins E-Mode

You supply USDC and want to borrow against a stable basket more efficiently.

If your account has only stable-compatible debt and collateral, enabling Stablecoins can increase capital efficiency versus Default Mode.

Example 2: Leaving E-Mode

You are in Liquid Staking Tokens mode and want to go back to normal reserve rules.

Neverland checks:

whether the switch would make your current collateral unsafe whether your health factor would drop below 1.01

If not, the account can return to Default Mode.

Example 3: Asset Needs E-Mode for Collateral

You try to enable collateral on an asset whose useful collateral treatment depends on a compatible category.

Result:

the collateral toggle is blocked the app tells you to enable the required E-Mode first

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FAQ

Is E-Mode optional?

Yes. You can stay in Default Mode and use reserve-native rules.

Can I be in multiple E-Mode categories at once?

No. Only one category can be active at a time.

Does E-Mode affect only the asset I clicked?

No. E-Mode changes the entire account's correlated collateral and borrowing basket for the market.

Can E-Mode improve my health factor?

Sometimes yes, sometimes no.

It depends on:

what you supplied what you borrowed whether those assets are compatible with the target category how the category changes your collateral efficiency

Why is the app blocking my switch?

The most common reasons are:

incompatible active borrows collateral that would become unusable or zero-LTV projected health factor below 1.01

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Risk Reminder

E-Mode increases efficiency by assuming stronger correlation between assets. That can improve capital usage, but it also means the account becomes more dependent on that correlation holding under stress.

Always review:

your current borrows your collateral mix your projected health factor whether Default Mode may be safer for your position structure