Silo is building technology so you can borrow any token using another securely. It is a non-custodial lending protocol for permission-less money markets.
We want to bring secure lend/borrow markets to all tokens in the same way Uniswap brought liquidity pools to thousands of tokens. This simply means you will be able to use any token as borrow collateral.
- Secure: In Silo, the impact of a token being hacked, exploited, or manipulated is isolated to the respective market, not the protocol.
- Efficient: Each market supports only 2 assets, the bridge token, and a unique token. This design concentrates liquidity in single pools and allows for a high degree of efficiency.
- Scalable: With Silo’s lending design, the risk is isolated at a market level, and therefore any of the ~10,000 tokens available today can theoretically have a lending market.
Non-custodial means you have control over your money at all times. Neither Silo nor others can take control over your deposited money.
Anyone with a connected wallet can create a lending market. Let’s assume you visit Silo.finance and discover that there isn't a market for $CRV. Well, you can create it by submitting a transaction via your wallet. This is different from AAVE and Compound that control what tokens get accepted in their protocols.
Yes. Here is the token address: https://etherscan.io/address/0x6f80310ca7f2c654691d1383149fa1a57d8ab1f8
Yes, we are a community-first project. Silo is the future of lending and we will remain committed to the ethos of the blockchain.
We are focused on building our protocol as of now.
We are preparing for security audits. Both audits will take place in January 2022. Once they are completed, we will bring Silo to you.
We are a team of 7, working full-time on Silo. We have got an awesome advisor helping us in many areas.
- Smart contracts lead
- Ops leads
- Frontend lead
- Growth lead
- Senior smart contracts engineer
- Blockchain engineer
- Blockchain engineer
We’re always looking for talented people to help us. You can create videos, memes, and other content to spread the word about us. If you have worked in marketing and community growth, talk to us.
To answer the question, let's look at a practical example. Say you deposit $UNI in AAVE. Someone else borrows your $UNI with $AMP as collateral. If something bad happens to $AMP, not only $UNI depositors are at risk, but also everyone who deposited any token in the protocol - every single user in AAVE is exposed to the systemic risk.
Rari Fuse is not different. Look at Tetranode pool, it has ~19 tokens. If you do NOT trust one token out of the 19, the pool is worthless to you. This is a big problem because Rari can no longer match lenders/depositors at because every user has a list of tokens they trust and tokens they don'ts. They would need millions of pools in order to match everyone's risk profile.
Silo Finance is different. We have one market for an asset, paired with ETH, the trusted bridge token. Let's continue with the above example.
You deposit your $UNI in UNI-ETH Silo (market). Someone else deposits $AMP in AMP-ETH Silo and borrows your $UNI. Behind the scene, SILO has moved ETH collateral from AMP-ETH to UNI-ETH. Your $UNI deposit is protected with ETH now, not $AMP. If $AMP goes bad, ETH lenders in the AMP-ETH are impacted.
You see now how Silo Finance can scale: we need one silo for each token (xToken-ETH), and we need people to deposit $ETH in the markets they trust. You can customize your risk the way you want.
We're building Silo to be chain-agnostic, that is it can be deployed on Ethereum, EVM-compatible chains, L2 scalability chains, and beyond. We have not decided yet where we will be deploying it first as there are many factors to consider. Stay tuned for more information.
No. We have coded Silo from the bottom up. Forking and reengineering a battle-tested code would introduce significant security risks and limit the protocol design choices as we build towards our product vision.
When a market (silo) is suspected of an exploit, or exploited, the community can disable all functions in the silo until a fix is found. Let's assume the price oracle of the UNI Silo is compromised. In this event, the team multisig wallet can freeze the UNI Silo until governance finds a better price oracle to replace the current one. For that purpose, a governance vote can be created. Votes will take 8 days + 2 (total 10 days) for that change to take place given current governance parameters.
Pausing the UNI Silo for one week exposes depositors and borrowers in the Silo to significant risk of getting liquidated when the Silo is active again with the updated price oracle.
The liquidation risk comes from the fact that during the freeze a user’s collateral might have dropped significantly or a user’s loan (debt) has grown in value to the liquidation point. Consequently, the moment the vote is executed and the silo unfreezes, all undercollateralized loans will likely be liquidated immediately to prevent $ETH depositors in the UNI Silo from experiencing bad debt .
The borrow APY of an asset is the current interest rate you will pay for borrowing the asset. Interest rate changes based on the utilization rate and will constantly accrue debt to your outstanding borrow position.
There are two overflow scenarios that affect the interest rate model:
- 1.Total borrowed or deposited amount reaches 2^196 / 10^18 - that is approximately 10^41
- 2.Compounded interest rate since the last transaction reaches 2^16 - that is 6553600%
In both of these cases, current APY is set to 0% and interest accumulation is halted.
When a silo leaves the overflow conditions, its interest rate model is reset to the lowest possible APY value as if the silo is starting anew. Stopping interest accrual in these extreme conditions is necessary to ensure that an overflow in the system's variables doesn't prevents users from placing valid transactions.
Here is a list of all fees that the DAO can turn on/off via governance:
- Protocol Fee (10% now): Every time interest is paid by borrower, the protocol would take an additional fee. If protocol fee is set to 1%, and a user has accrued $100 of interest, Silo adds $101 of interest in total that borrowers would have to pay.
- Entry Fee (0% now): Entry fee is taken during opening borrow position. Let's assume the entry fee is set at 10%. Upon borrowing $100, the protocol would immediately add 10% ($10) to borrower's debt, effectively making total debt $110.
- Liquidation Fee (0% now): The Protocol would take a fee on every successfil liquidation. If the liquidation fee is set to 1%, and liquidator is liquidating a 1,000 USDC loan collateralized by 1 ETH, the protocol would take 1% of 1 ETH, leaving leaving 0.99 ETH for the liquidator.
A fee can range from 0% to 100%. A maximum value for each fee is 100% to prevent accidental damage to the protocol.
The APY only grows above the floor rate when utilization exceeds the optimal point. When utilization goes back from a point above optimal to one below, the APY starts decreasing until it reaches the floor rate.
An estimated APY that you will likely pay after completing the transaction. The value is calculated based on a projected utilization of the token asset in question.
If you are getting the error message below, it is possible you've set a spending allowance smaller than the amount you are sending.
By default, when the Silo lending app asks for approvals, it does set the spending cap to "max" so that users can deposit unlimited amounts. However, users can override the default setting by setting a custom allowance.
To fix the error:
- Revoke approval for the token asset you're depositing.
- Once revoked, visit the Silo lending app and trigger a new approval.
Note you can also increase allowance via revoke.cash if you don't want to revoke completely.
You can increase your spending allowance for the token you are repaying.
Let's say you are repaying a DPX:
- Go to the DPX token address contract - Write Proxy tab: https://arbiscan.io/token/0x6C2C06790b3E3E3c38e12Ee22F8183b37a13EE55#writeProxyContract
- Connect your wallet "Connect to Web 3"
- Navigate to 6. Increase allowance and enter SiloRouter address in "spender (address)". Router address is 0x9992f660137979C1ca7f8b119Cd16361594E3681
- Enter the following amount in "addedValue (uint256)": 1000000000000000000000000000000 (basically you are authorizing a max spending amount, equal to using Max in MetaMask)
- Click on Write
- Sign a transaction in your wallet
- Some token contracts like DPX and MAGIC use a proxy, but others, like GMX do not
- When they click write, you need to sign a transaction in your wallet
On Arbitrum, the smallest amount you can borrow is $10.
There is not a minimum borrow amount set on Silo Finance Ethereum.
You can calculate the price of your deposit asset or loan asset. Generally, your position become insolvent and therefore flagged for liquidation when:
Collateral value >= Loan value * 1/LiquidationThreshold (LT)
- You deposit $650 in rDPX
- You borrow $200 in USDC
- rDPX Liquidation Threshold (LT) is 60%
Let's apply the above formula:
$650 >= $200 * 1/0.6 = $333.33
This means your collateral value must remain above $333.33 in order to avoid liquidation.
Now we can calculate the liquidation price of rDPX.
Let's assume rDPX market value is $22
Divide $333/$22 = ~$15.15 per rDPX.
In other words, you will get liquidated if rDPX goes down to ~$15.15.
PS: You can obtain the token's Liquidation Threshold from the asset's page, under the Deposit view.
When you deposit Curve LP tokens into a silo, you are taking four actions bundled together in one transaction as follows:
- Staking Curve LP tokens into a Convex pool
- Minting Silo sTokens as a claim on your deposit.
- Depositing Silo sTokens into the Silo.
View this example transactions to deposit stETH-ETH Curve LP token into the ETH/stETH silo. https://etherscan.io/tx/0xb8b51a08b254442ed6f25e37f6171b8baa1294c802f322681d7a6c9c7bcda394