In this post:
- Silo has launched its V2 protocol on Sonic to enable users to access risk-isolated markets.
- The firm said $400M was already locked into Silo V2, where Sonic users can earn a yield on their capital while mitigating risk.
- The V2 launch also includes deployer revenue that will incentivize tailored market development for Sonic.
Silo announced on March 14 that it has launched its V2 protocol on Sonic Network. The firm said the protocol will enable users of high-performance L1 networks to access risk-isolated markets.
The non-custodial DeFi lending marketplace acknowledged that the V2 launch followed extensive auditing and will bring programmable lending markets to Sonic for the first time.
Silo launches its V2 protocol on Sonic
Silo DeFi lending platform revealed on Friday the launch of its V2 protocol on Sonic. The firm argued that the V2 will allow Sonic users to access risk-isolated markets easily. The protocol will also bring programmable lending markets to Sonic.
The crypto lending firm acknowledged that the successful completion of multiple audits had enabled Silo V2 to exit beta. The extensive audits have also allowed Silo V2 to begin rolling out isolated lending markets across multiple chains, starting with Sonic.
Silo highlighted that more than $400 million was already locked into Silo V2. The company argued that Sonic users can earn a yield on their capital while mitigating risk. The DeFi platform added that future expansion will include Mainnet, Arbitrum, Base, and many other EVM L2 and EVM-compatible chains.
The firm said that it built on the success of V1, which facilitated loans worth hundreds of millions of dollars across over 50 isolated lending pools on Ethereum and numerous Layer 2s. Silo also corroborated that V1 maintained an unbroken record of solvency over the years.
Silo V2 launch includes permissionless market deployment and deployer revenue
The lending platform mentioned that the enhanced V2 protocol will introduce customizable twin-asset lending markets for any ERC-20 token. These markets will allow ERC-20 deployers to tailor loan-to-value (LTV) rations, liquidation thresholds, oracles, and interest rate models.
Silo revealed the key features of its V2 will include permissionless market deployment and optional “hooks” that support new functionality. The new functionality will include interconnecting market clusters and deploying idle liquidity to other dapps for yield. The firm also said its V2’s new functionality will include creating fixed-term and permissioned markets for regulated assets. The DeFi platform also acknowledged that the use of the ERC-4626 standard will ensure seamless third-party integrations.
The lending company noted that modular liquidation and interest rate options with V2, ranging from traditional to auction-based or fixed-rate, will offer flexibility for diverse assets like stablecoins or real-world assets (RWAs). Silo argued that a dual-oracle system reduced bad debt risk by separating LTV and liquidation threshold calculations.
The firm said the V2 launch introduced deployer revenue to incentivize tailored market development. The deployer revenue is an optional fee on interest and incentives that accrued to market creators as an ERC-721 token. Silo also noted that its V2’s isolated design can mitigate systemic risks synonymous with traditional pooled lending.
The lending platform said that Silo V2 on Sonic was designed to provide secure, adaptable lending solutions. The firm argued that Sonic’s programmable markets allowed deployers to address optimizing yield or managing risk. Deployers can address the specific needs while maintaining the isolation that protects users from broader system failures. Silo said its high-speed infrastructure supported Silo V2 with its focus on scalability and developer tools. The firm believes that Sonic will enhance its ability to unlock new use cases for decentralized lending.
