Silo Finance has been making waves in DeFi lending for a while now, and its recent launch of V2 on high-performance Layer-1 Sonic has been welcomed by lenders and borrowers alike.
With nearly $44 billion currently locked in DeFi lending, and Silo sitting just inside the top 20 protocols by TVL, the launch of V2 couldn’t be more timely. Indeed, a recent Galaxy Digital report underscores the sector’s strength: by the end of 2024, DeFi lending platforms had $19.1 billion in open borrows, almost double the $11 billion reported by their CeFi counterparts.
Against this backdrop, Silo is stepping up its game with V2, introducing compelling features like risk-isolated lending pools and customizable markets, in addition to a revamped UI.
Safer Lending, Smarter Markets
Crypto lending has been around, in one form or another, since 2017 – although it’s come a long way since the early days of ETHLend, Bancor, and MakerDAO. In recent years, competition between providers has led to better terms and improved UX, with users appreciative of benefits like instant loan access, no intermediaries, and transparent books.
Founded in 2021, non-custodial lending protocol Silo has already facilitated loans worth hundreds of millions of dollars in over 50 markets – notably without running into problems like many of its competitors. With V2, Silo aims to tackle one of the industry’s true pain points: systemic risk.
While traditional lending pools often expose users to shared risks, where a single market’s failure can ripple through the entire system, Silo favors risk-isolated pools composed of twin-asset markets that stand alone: if one market hits turbulence, the others stay afloat. This approach, combined with a dual-oracle system that separates loan-to-value (LTV) calculations from liquidation triggers, slashes the risk of bad debt and keeps the system secure – even during savage market swings.
With the recently-launched V2, Silo allows market creators to fine-tune settings like LTV ratios, liquidation thresholds, and interest rate models for specific ERC-20 tokens. As a consequence, lenders and borrowers are better able to craft strategies to fit their needs, whether they’re dealing with stablecoins or more volatile assets.
Perhaps the niftiest feature of Silo’s latest offering is that anyone can create a lending market for any ERC-20 token without permission. Moreover, the slick new UI makes it easy for users to find the best risk-adjusted yields, with the legacy UI also retained as an option for change-averse users. Plus, integration with the ERC-4626 standard means Silo V2 plays nicely with other DeFi apps, letting users move funds and interact across platforms with ease.
Beyond customization, Silo V2 introduces “hooks” or programmable extensions that let developers redirect idle liquidity to other protocols for extra yield. Market creators get a cut of the action via a revenue-sharing model, earning fees via ERC-721 tokens.
With plans to expand to Ethereum, Arbitrum, Base, and other EVM-compatible chains in the near future, Silo is making its flexible, user-friendly lending model accessible to a broader demographic, and throwing the gauntlet down to rivals to do the same. For DeFi users tired of one-size-fits-all lending, Silo’s got the goods.
This article contains sponsored content from an external source. The opinions and information presented may differ from those of DailyCoin. Readers are encouraged to independently verify the details and consult with experts before acting on any information provided. Please note that our Terms and Conditions, Privacy Policy, and Risk Warning have been recently updated.
