Silo, a non-custodial decentralized finance (DeFi) platform, has officially launched the Silo V2 protocol on Sonic – a high-performance Layer 1 blockchain network. This deployment marks a major step forward in providing more secure and flexible decentralized lending services.
Risk-Agnostic Lending System
Silo V2 on Sonic allows users to participate in lending markets with a risk-agnostic model. This means that if one market experiences problems, other markets are still protected, without a chain reaction. This upgrade significantly reduces the risk of liquidity loss across the entire system.
After undergoing multiple security audits, Silo V2 has attracted $400 million in locked value (TVL), affirming the community's confidence in the platform. Previously, Silo V1 had great success facilitating hundreds of millions of dollars worth of loans across over 50 markets without any liquidity issues.
Flexible lending market making
With Silo V2, anyone can create a lending market for any ERC-20 token without permission. This gives maximum flexibility to both lenders and borrowers, allowing customization of factors such as loan-to-value (LTV) ratio, liquidation thresholds, and interest rates.
Another standout feature is “hooks,” which allow users to add new utilities such as connecting to markets, optimizing profits from idle funds, or setting up fixed-term loans. In addition, Silo V2 uses the ERC-4626 standard, making it easy for the platform to integrate with other DeFi applications, enhancing interoperability in the decentralized finance ecosystem.
Optimized risk management
To ensure user safety, Silo V2 implements a dual oracle system to separate liquidation and LTV calculations. This helps to assess risk more accurately and reduce the risk of bad debt.
Another notable improvement is the use of ERC-721 tokens to reward market makers, allowing them to earn additional income from interest fees. This not only encourages more user participation but also helps create a more diverse and competitive lending ecosystem.
Future expansion plans
After launching on Sonic, Silo aims to expand V2 to major blockchain networks such as Ethereum, Arbitrum, and Base. This will help the platform reach more users and strengthen Silo's position in the DeFi space.
With a combination of security, scalability, and flexibility, Silo V2 promises to take decentralized lending to the next level, making DeFi easier and safer for users than ever before.
