How Silo Works
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 our bridge assets ($ETH and $XAI on Ethereum or $ETH and $USDC on Arbitrum) by depositing collateral of any token asset supported on the network. Each asset counts on its own risk-isolated lending market or silo.
Collateral token assets can be found on the Markets page of the Silo dapp.
If you are on Ethereum, once you have borrowed $ETH you can deposit it in one or multiple silos and use it as collateral to borrow another token from that same silo.
If you are on Arbitrum, once you have borrowed $ETH or $USDC you can deposit it in one or multiple silos and use it as collateral to borrow another token from that same silo.
The following dashboard shows 4 positions:
1- I have deposited APE and borrowed ETH - I took these actions in the APE Silo
2- I have deposited ETH and borrowed CVX - I took these actions in the CVX Silo
Positions in the Ape and CVX Silos are isolated - if an exploit occurs 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, exploiting 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 continue to be added. Soon you will be able to use a broad range of tokens as collateral to borrow ETH or XAI as well as cross-borrowing as shown above. All deposits and borrows remain isolated and never share risk.