Silo, a decentralized finance marketplace, has just announced the launch of its V2 protocol on the high-performance Layer 1 network, Sonic. This move allows users on Sonic to access lending markets where risks are kept separate, ensuring that one market’s trouble does not affect the others. Following successful security audits, Silo V2 is now live and has already attracted $400 million in locked funds on the platform.
The previous version, Silo V1, was a major player in the DeFi world, facilitating loans worth hundreds of millions of dollars across more than 50 markets without any issues. With Silo V2, users can create lending markets for any ERC-20 token and customize settings such as loan-to-value ratios, liquidation thresholds, and interest rates. This level of flexibility empowers lenders and borrowers to tailor their strategies to specific assets and market conditions.
A key upgrade in V2 is that users no longer need permission to create a market—it is open to anyone. The introduction of “hooks” also allows users to add new features like connecting different markets, redirecting idle funds for extra yield, or setting up fixed-term loans. Additionally, the use of the ERC-4626 standard enables Silo V2 to communicate with other DeFi apps, simplifying fund movement and interaction with various platforms.
In terms of risk management, Silo V2 employs a dual-oracle system to separate LTV and liquidation threshold calculations, enhancing risk assessment accuracy and reducing the risk of bad debt. Market creators can also earn fees on interest and incentives through an ERC-721 token, creating a new revenue stream while fostering a more diverse range of lending options.
Looking ahead, Silo plans to expand V2 to Ethereum, Arbitrum, and Base, further solidifying its position in the DeFi space. With its blend of flexibility, security, and scalability, Silo V2 is set to make decentralized lending more accessible and user-friendly than ever before on various platforms.
