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Alisa Davidson
Published: March 14, 2025 at 8:00 am Updated: March 14, 2025 at 5:31 am
Edited and fact-checked:
March 14, 2025 at 8:00 am
In Brief
Silo announced the launch of its V2 protocol on Sonic, allowing users on the Layer 1 network to access risk-isolated markets.
Non-custodial decentralized finance (DeFi) lending marketplace, Silo announced the launch of its V2 protocol on Sonic, allowing users on the high-performance Layer 1 network to access risk-isolated markets. This V2 release comes after thorough auditing and introduces programmable lending markets to Sonic for the first time.
With the successful completion of several audits, Silo V2 has exited its beta phase and begun rolling out isolated lending markets across various chains, starting with Sonic. Over $400 million is currently locked into Silo V2, enabling Sonic users to earn yields on their capital while reducing associated risks.
Looking ahead, Silo plans to expand to additional chains, including Mainnet, Arbitrum, Base, and other Ethereum virtual machine (EVM) Layer 2 and EVM-compatible networks.
Silo V2: Introducing Customizable Twin-Asset Lending Markets For ERC-20 Tokens, Permissionless Market Deployment, And Deployer Revenue
Silo V2 builds upon the achievements of its predecessor, V1, which has enabled loans totaling hundreds of millions of dollars across more than 50 isolated lending pools on Ethereum and various Layer 2 networks, while consistently maintaining solvency. The upgraded V2 protocol introduces customizable twin-asset lending markets for any ERC-20 token, giving deployers the ability to adjust loan-to-value (LTV) ratios, liquidation thresholds, oracles, and interest rate models.
Notable features of Silo V2 include permissionless market deployment and optional “hooks” that facilitate new functionalities, such as connecting market clusters, directing idle liquidity to other decentralized applications (dApps) for yield generation, or creating fixed-term and permissioned markets for regulated assets. The adoption of the ERC-4626 standard ensures smooth integration with third-party platforms.
V2’s modular liquidation and interest rate options – including traditional, auction-based, or fixed-rate models – provide greater flexibility for a wide range of assets, from stablecoins to real-world assets (RWAs). A dual-oracle system further mitigates bad debt risks by separating the calculations for LTV and liquidation thresholds.
The V2 launch also introduces deployer revenue, an optional fee on interest and incentives that is accrued by market creators as an ERC-721 token. This feature encourages the development of customized markets. Silo V2’s isolated design helps mitigate systemic risks commonly associated with traditional pooled lending.
Silo V2 on Sonic is built to provide secure and flexible lending solutions. Its programmable markets enable deployers to tailor the platform to specific goals, such as optimizing yield or managing risk, while maintaining the isolation that protects users from broader systemic failures.
Sonic’s infrastructure supports Silo V2 with an emphasis on scalability and developer tools, enhancing the platform’s ability to enable new decentralized lending use cases.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa Davidson
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
More articles
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