Silo Protocol

Silo Protocol is a non-custodial lending platform built for open money markets. Its core design isolates each borrowing market into independent "silos," where each silo pairs a unique asset with a shared bridge asset (e.g., ETH). Users can deposit assets to earn interest or borrow against collateral, while the bridge asset connects all silos to maintain liquidity.

The main innovation is risk isolation. Traditional lending protocols often share one pool, meaning a risky asset can contaminate the entire system. Silo prevents this by separating markets, so if one asset fails, only that silo is affected. This makes it safer to list long-tail or volatile assets without endangering other users.

Silo solves the problem of systemic risk in DeFi lending. By isolating risk, it allows permissionless creation of markets for any ERC-20 token, while protecting lenders from cross-market contagion. Its competitive edge lies in combining flexibility with safety—enabling broader asset support without compromising protocol stability.

In the past six months (March to September 2026), Silo has focused on expanding its supported assets and improving the user experience. However, the protocol experienced a security incident in June 2025, where a vulnerability led to a loss of approximately $540,000. The team responded by patching the issue and reinforcing audits, but the event highlights ongoing challenges in DeFi security.