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.

$XAI's collateral status was removed in a recent update. $XAI is still borrowable from silos and can be LPed or swapped into other stablecoins but cannot be used as collateral.

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.