• Press Releases
    • Submit a press release
    • Read All
  • Contact us
Advertise
Bitcoinist.com
Buy Neo Pepe
No Result
View All Result
🚀 BUY NEO PEPE PROTOCOL 🚀
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
    • Price
      • Bitcoin Price
      • Ethereum Price
      • Binance Coin Price
      • Litecoin Price
  • Industry
    • Industry News
    • Press Releases
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • How to do Crypto Gambling
      • Crypto Casinos
        • Ethereum Casinos
        • Solana Casinos
        • LiteCoin Casinos
        • DogeCoin Casinos
        • Live Crypto Casinos
        • New Casinos
        • Instant Withdrawal Casinos
        • Cash App Casinos
        • No KYC Casinos
        • VPN Casinos
        • Offshore Casinos
          • Crypto Casinos IT
          • Crypto Casinos ES
            • All Guides
          • Crypto Casinos JP
          • Crypto Casinos SG
          • Crypto Casinos MY
          • Crypto Casinos KR
          • No GAMSTOP Casinos in UK
          • No Cruks Casinos NL
      • Crypto Betting
        • No ID sportsbooks
    • Play Crypto Games
      • Crypto Poker
      • Crypto Slots
      • Crypto Blackjack
      • Crypto Crash Gambling
        • Aviator Sites
      • Plinko
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Bitcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
  • Events
  • Play Games
  • 200 FREESPINS
Breaking News: Tether Announces Strategic Partnership To Combat Stablecoin Misuse
🚀 BUY NEO PEPE PROTOCOL 🚀
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
    • Price
      • Bitcoin Price
      • Ethereum Price
      • Binance Coin Price
      • Litecoin Price
  • Industry
    • Industry News
    • Press Releases
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • How to do Crypto Gambling
      • Crypto Casinos
        • Ethereum Casinos
        • Solana Casinos
        • LiteCoin Casinos
        • DogeCoin Casinos
        • Live Crypto Casinos
        • New Casinos
        • Instant Withdrawal Casinos
        • Cash App Casinos
        • No KYC Casinos
        • VPN Casinos
        • Offshore Casinos
          • Crypto Casinos IT
          • Crypto Casinos ES
            • All Guides
          • Crypto Casinos JP
          • Crypto Casinos SG
          • Crypto Casinos MY
          • Crypto Casinos KR
          • No GAMSTOP Casinos in UK
          • No Cruks Casinos NL
      • Crypto Betting
        • No ID sportsbooks
    • Play Crypto Games
      • Crypto Poker
      • Crypto Slots
      • Crypto Blackjack
      • Crypto Crash Gambling
        • Aviator Sites
      • Plinko
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Bitcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
  • Events
  • Play Games
  • 200 FREESPINS
Bitcoinist.com
No Result
View All Result
Breaking News: Tether Announces Strategic Partnership To Combat Stablecoin Misuse
silo

The Reason Behind the Creation of the Silo Protocol

Bitcoinist
by Bitcoinist
3 years ago
·
Posted in Industry
Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

DeFi has witnessed the greatest innovations these past couple of months. We have seen new protocols and applications emerge sporadically, as well as the creation of improved versions of existing ones. We are closer to the future that we envisioned – a fully decentralized financial system that cuts across all aspects; money markets, insurance, trading, lending, and investments.

Crypto lending protocols are platforms that offer cryptocurrency loans in a trustless manner. It allows the holders to stake their coins in the DeFi lending platforms for lending purposes. On the DeFi platform, a borrower can access a loan, allowing the lender to earn interest once the loan is returned. This process is carried out from the start till the finish without intermediaries.

There are several existing DeFi lending protocols. They vary in the types of tokens they accept, their methods, and security mechanisms. Maker, for instance, allows its users to borrow money via DAI tokens. Aave is a non-custodial liquidity platform for earning interests on deposit and borrowing assets. It allows the lenders to deposit their cryptocurrencies in a pool and receive an equivalent amount of aTokens, its native token. On the other hand, Compound is an algorithmic and autonomous money market protocol designed to unlock numerous open financial applications. By using smart contracts, Compound automates the management and storage of capital on the protocol.

Silo is a non-custodial lending protocol that was created as a result of shortcomings of existing lending protocols. Most of these protocols are highly restrictive when it comes to accepting token assets. They usually have their security structure based on gatekeepers guarding a whitelist. This poor structure has led to countless bad debts and loss of assets.

Overview of the Silo Protocol

Silo is a permissionless-based lending protocol designed to offer secure and efficient money markets for all token assets through a permissionless, risk-isolating lending protocol. When created, every Silo shares the same collateral factors that can be configured for each Silo. They all have a bridge asset like ETH and a unique token. On September 15, 2021, Silo entered the ETHGlobal’s 2021 Hackathon which it eventually won. The protocol functions on three major parameters that include security, efficiency, and inclusiveness. You can read the LITEPAPER for more details about the Silo Finance project.

Silo VS other Tokens that Implement Isolated Money Markets

In order to understand the purpose or reason for the creation of the Silo protocol, we compare it to other existing protocols that implement isolated money markets. Among the several protocols, we examine the two extremes:

  • Kashi creates an isolated money market for any pair of tokens imaginable. Dai alone has over 30 markets such as DAI-ETH, DAI-WBTC, DAI-COM, etc. This market design achieves high security at the expense of efficiency; liquidity is fragmented, and markets are spread too thin. Silo Protocol, on the other hand, isolates the risk of any asset to a specific silo, allowing new and higher-risk assets to be immediately utilized in lending markets without causing systemic risk to other assets held.
  • Rari’s Fuse creates isolated pools, each functioning like Aave or Compound. Because a pool can consist of many tokens, the entire pool is rendered risky when one of the token assets cannot be trusted for any reason. In other words, we are back to the same problem we see with CREAM/Aave/Compound, where users share the risk of all tokens in the pool. However, the Silo protocol mechanism has circumvented this issue by compartmentalizing every asset in different Silos. Each of these Silos contains a unique token and a bridge asset.

Conclusion

The Silo protocol has indeed come at the right time in the DeFi’ forward’ trajectory. With its innovative approach, it is better positioned to solve the frustrations borrowers and lenders face on most existing protocols.

 

 

Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
ShareTweetShareShare

Sign Up for Our Newsletter!

For updates and exclusive offers enter your email.

I consent to my submitted data being collected and stored.
Bitcoinist

Bitcoinist

Follow

Bitcoinist is the ultimate news and review site for the crypto currency community!

Full Profile

Related Posts

Earn $8,160 a day, an opportunity to leverage a new era of cross-chain revenue, XRP users flock to BJMining cloud mining

Earn $8,160 a day, an opportunity to leverage a new era of cross-chain revenue, XRP users flock to BJMining cloud mining

20 hours ago
Start a Bitcoin Miner Using Dogecoin (DOGE) and Easily Earn $8,900a Day

Start a Bitcoin Miner Using Dogecoin (DOGE) and Easily Earn $8,900a Day

22 hours ago
Net profit of $6,450 per day! BJMining turns your Dogecoin (DOGE) into a “daily wage asset”

Net profit of $6,450 per day! BJMining turns your Dogecoin (DOGE) into a “daily wage asset”

23 hours ago
PaladinMining Leads Cloud Mining Market Amid XRP Fund Management Craze, Sign Up and Get $15 in Free Bonuses

PaladinMining Leads Cloud Mining Market Amid XRP Fund Management Craze, Sign Up and Get $15 in Free Bonuses

1 day ago
Only 3 Markets Capture 79% of Western Europe’s Crypto Readership, Q1 Data Shows Amid Region-Wide Media Shakeup

Only 3 Markets Capture 79% of Western Europe’s Crypto Readership, Q1 Data Shows Amid Region-Wide Media Shakeup

1 day ago
Why should investors pay attention to FunToken’s climb in the 6-day gainer list?

Why should investors pay attention to FunToken’s climb in the 6-day gainer list?

1 day ago
Please login to join discussion

Premium Sponsors

Press Releases

  • More and more ADA and ETH holders are quietly turning to a...

    23 minutes ago
  • More and more XRP and ETH holders are quietly turning to...

    25 minutes ago
  • Bitget Partners With UNTOLD Festival, Where Web3 Takes The...

    1 hour ago
  • Cloud Mining

    Missed Ethereum’s Surge? Don’t Miss BTC Miner’s Cloud...

    2 hours ago
  • MEXC June Token Listings Deliver Up to 9,100% Returns...

    2 hours ago

Bitcoin news portal providing breaking news, guides, price analysis about decentralized digital money & blockchain technology.

Buy Neo Pepe

Bitcoin

  • News
  • Price
  • Businesses
  • Acceptance
  • Technology
  • Investment
  • Regulation
  • Reviews

Altcoins

  • News
  • Price
  • Ethereum
  • Ripple
  • Litecoin
  • EOS

Categories

  • Blockchain
  • Security
  • FinTech
  • Technology
  • Trending
  • Breaking News
  • Press Releases
  • How to

About Us

  • Advertise
  • Contact us
  • Editorial Policy
  • Privacy Policy
© 2025 Bitcoinist.com. All Rights Reserved.
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
    • Price
      • Bitcoin Price
      • Ethereum Price
      • Binance Coin Price
      • Litecoin Price
  • Industry
    • Industry News
    • Press Releases
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • How to do Crypto Gambling
      • Crypto Casinos
      • Crypto Betting
    • Play Crypto Games
      • Crypto Poker
      • Crypto Slots
      • Crypto Blackjack
      • Crypto Crash Gambling
      • Plinko
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Bitcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
  • Events
  • Play Games
  • 200 FREESPINS
Advertise

© 2025 Bitcoinist. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy Center or Cookie Policy.