What is Silo?

What is the Silo Protocol?

Silo is a risk-isolated lending market that allow users to deposit tokens to earn interest or as collateral to borrow other tokens.

Silo is actually composed of multiple individual lending markets consisting of a base asset and the bridge asset(s) (this could be $ETH or stablecoins depending on the deployment).

What makes Silo different from other lending markets?

Risk-Isolation

By creating individual lending markets for each base asset, each Silo market is completely separated from every other Silo market. This means lenders only take on the risk of the market they choose to deposit into i.e. the base asset.

This is distinct from legacy platforms like Aave that pool assets, with lenders exposed to the risk of all tokens on the platform.

Markets for any Token

Silo can create markets for any token where there are willing lenders. This allows for lending markets for esoteric assets like Curve LP Tokens and Pendle PT tokens.

This is distinct from shared-pool platforms where new assets are incredibly difficult to list since each new token introduces incremental systemic risk.

Lender-Defined Risk

Bridge asset depositors can choose what silo to deposit into which defines their risk exposure.

This is distinct from shared-pool platforms where you are automatically exposed to all tokens upon deposit.

Risk-Defined Interest

Silo interest rates are modular, allowing different interest rates on a per silo per token basis. This allows, for example, higher interest rates to compensate lenders against more volatile tokens.

This is distinct from shared-pool platforms where each token has a unified interest rate - lenders do not receive better interest rates to reflect the additional risk.