title: [Direct-to-AIP] Ethena E-Mode Consolidation on Aave V3
author: @TokenLogic
created: 2026-11-13
Summary
This publication proposes a common set of reference e-modes for Ethena collateral on Aave V3 Core, Plasma, Mantle, Monad and Avalanche. The proposed parameters are 91% LTV and 93% LT for USDe against stablecoins, and 90% LTV and 92% LT for sUSDe against stablecoins.
Legacy collateral on Core and Plasma would be retired through per-asset LTV-zero flags while keeping existing LTs, except Plasma #21, whose LT returns from 93.1% to 93%, and Plasma #23, which is aligned to the sUSDe reference parameters. The proposal also retires the matured PTs on Monad and in X Layer #7 and #8, and removes USDe borrowing from Avalanche #4.
Motivation
Overview
Several legacy Ethena PT e-modes continue to accept USDe or sUSDe after their PTs have matured. Their parameters and borrowable assets differ from the reference e-modes, so users with similar collateral can face different parameters and abuse Aave risk settings. Across Core #10, #29 and #34 and Plasma #13 and #21, legacy USDe e-modes account for approximately $709M of collateral and $637M of debt. Most of these categories offer 91% LTV, while Plasma #21 offers 91.1%, compared with 90% in the existing USDe reference modes on both markets. A common reference configuration would reduce the number of categories used for these positions.
USDe and sUSDe Deposits
Figures at the November 10, 2026 snapshot (Core block 26,387,055, Plasma block 37,400,956) cover all wallets with USDe or sUSDe enabled as collateral in the listed categories. Debt is those wallets’ total debt, including debt supported by other collateral.
Legacy Collateral and Existing Positions
Per-asset LTV-zero flags stop legacy collateral from supporting new borrowing while each category keeps its LT, so existing health factors are unchanged, and no position is hurt, except for the Plasma #21 and #23 changes below. A position borrowing USDC, USDT or USDT0 that wants to keep borrowing moves to the reference e-mode in a single transaction; USDe and USDtb debt is not permitted there.
Plasma #23 moves from 90.1% / 92.1% to 90% / 92%, in line with the sUSDe reference mode Plasma #2. This lowers health factors by about 0.001 and liquidates no positions at the snapshot.
The LT of legacy Plasma #21 returns from 93.1% to 93%, in line with reference mode Plasma #1 and the other legacy USDe categories. The lowest resulting health factor at the snapshot is 1.008, so no position is liquidated.
USDe Denominated Borrowing
The retirement list includes Core and Plasma categories that permit USDe borrowing against USDe, sUSDe or their matured PTs, with LTs of up to 96%. USDe is also removed from the borrowable assets of Avalanche #4, where about $1.4k of USDe is borrowed in total.
Specification
Part A: Reference E-Mode Parameters
The following updates apply to the existing reference categories. Liquidation bonuses, collateral membership, borrowable assets, and isolation flags remain unchanged in these categories, except that USDe is removed from Avalanche #4’s borrowable assets.
Core #2, Plasma #2, Mantle #1 and Monad #2 already provide 90% LTV and 92% LT for their sUSDe reference configurations and require no parameter changes. Plasma #23 moves from 90.1% / 92.1% to 90% / 92% to match Plasma #2, with its liquidation bonus unchanged; its sUSDe retirement is specified in Part B. Plasma #21’s LT moves from 93.1% to 93%, with its LTV and liquidation bonus unchanged; this can be executed in the AIP or by the Risk Stewards after it.
New Monad USDe reference e-mode
Monad’s existing #2 combines USDe and sUSDe at 90% LTV and 92% LT. A separate USDe reference category is proposed with the following configuration:
The borrowable set matches Monad #2. The liquidation bonus and isolation setting match the USDe reference modes on Core #11, Plasma #1, Mantle #2 and Avalanche #3.
Part B: Legacy Collateral Retirement
Each entry below sets the named asset’s per-asset LTV-zero flag to true in the listed categories. Membership and isolation are unchanged, and category parameters are unchanged except for Plasma #21 and #23 (Part A).
The two October PTs matured at 00:00 UTC on the 22nd of October. Their flags apply to both the stablecoin-debt and USDe-debt categories. Existing LTV-zero flags on older collateral remain in place. All listed collateral is already flagged LTV zero in Core #9, #13, #14, #15, #18, #25, #27 and #28, and Plasma #5, #6, #7 and #8, so these categories require no additional flag change at the snapshot configuration.
Each change is a setAssetLtvzeroInEMode(asset, categoryId, true) call, checked against the configuration at execution.
Part C: Other Legacy Collateral
Part C retires all listed collateral in Monad #5 and X Layer #7 and #8. X Layer #9 is left unchanged so October PT positions can roll into the February PT, and its October PT is flagged by the next USDG rollover. Together, Parts B and C specify 38 per-asset LTV-zero flag changes.
Future PT rollovers
To keep this from building up again, we propose that each future PT rollover payload will also set LTV zero on every PT that has matured by the time it executes, in all e-modes where it is collateral. Once every PT in an e-mode has matured, the same payload flags the spot asset in that e-mode. Liquidation thresholds stay unchanged. PTs are flagged only after maturity, so no user has to sell a PT before it redeems at par.
Disclaimer
TokenLogic is an active service provider to the Aave DAO, the beneficiary of stream 100086 and the KPI as outlined in this publication. The scope of this engagement is available via this forum proposal.
TokenLogic supports and maintains an independent delegate voting platform within the Aave community.
TokenLogic and associated entities have no undisclosed material conflicts of interest at the time of submission.
Next Steps
- Gather feedback from the community.
- Escalate this proposal to the AIP stage.
Copyright
Copyright and related rights waived via CC0.