Silo Finance
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Silo Finance creates permissionless and risk-isolated lending markets.
Features
Lending Markets
- Lending markets allows users to lend and borrow assets. In traditional finance, this role is typically played by a bank. In decentralized finance (DeFi), protocols such as Silo allow users to fill this role themselves without relying on a centralized entity.
Permissionless
- Any token asset can have a silo. Users and projects alike can propose markets for token holders to vote on.
Isolated Risk
- Lenders deposit funds into an isolated lending market consisting of Token ABC and the bridge asset only. If Token XYZ experiences an exploit, Token ABC lenders will not be affected since risk is isolated to the Token XYZ market.
- Decentralized lending markets are not a new concept, with Aave and Compound pioneering the lending space. Silo aims to become the leading lending protocol by building upon the core drawbacks of the earlier protocols.
When you deposit a token asset into a silo, your deposit is represented by an ERC-20 token asset known as Shares Tokens or sToken for short. sTokens are your claim on the your deposited funds are minted on deposit and burned on withdrawal.
There are 2 different deposits you can make and hence 2 possible sTokens:
- Borrowable Deposit: A deposit that can be borrowed by other users.
- Protected Deposit: A deposit that cannot be borrowed by other users.