This page walks you through how to deposit a token on Silo. We will deposit USDC into the USDC Silo as an example.
To get the most out of Silo’s lending app, we will walk you through a simplified explainer.
Simply put, you can borrow ETH by depositing a collateral of any token asset. Right now 10 token assets are accepted as collateral, with each asset having its own market. Collateral token assets are:
USDC, WTBC, FRAX, FXS, APE, wstETH, CVX, CRV, BAL, and ETH (the bridge asset).
Once you’ve borrowed ETH, you can deposit it in one or multiple Silos and use it as collateral to borrow something else.
Take a look at this dashboard and notice 4 positions:
1- I have deposited APE and borrowed ETH - I took these actions in the APE Silo
2- I have deposited ETH and borrow CVX - I took these actions in the CVX Silo
Positions in the Ape and CVX Silos are isolated - if an exploit takes place in the APE Silo, depositors and borrowers in the CVX Silo remain safe.
This is different from how Aave/Compound works where all token assets share one pool - in their case, the exploit of any single token asset exposes the entire protocol to risk. In the Silo protocol every market is a separate pool.
As the Silo protocol grows, more markets will be added. Soon you will be able to use a broad range of tokens as collateral to borrow ETH. You can and then use the ETH to borrow whatever you like. All your deposits and borrows will remain isolated and never share risk.