The short answerSilo is built entirely around isolation: each asset has its own lending market, so risky collateral can be supported without exposing everyone else. That is the structurally correct answer for long-tail assets, and it fragments liquidity across many small markets where liquidation can be difficult.
Best forIsolated markets for long-tail collateral
Collateral & liquidation policyweight 25%
8.5avg 7.7
Oracle designweight 20%
7.5avg 7.6
Loss recordweight 20%
8.5avg 7.4
Rate qualityweight 15%
8.0avg 7.7
Governance & transparencyweight 10%
8.0avg 7.2
Coverageweight 10%
7.0avg 7.1
this service category average across 15Score = Σ mark × weight. Recommendable to most readers, with stated caveats. Methodology.
| Criterion | Mark | What we found | Source | Checked |
|---|
| Collateral & liquidation policy | 8.5 | not sourced yet | not sourced yet | — |
| Oracle design | 7.5 | not sourced yet | not sourced yet | — |
| Loss record | 8.5 | not sourced yet | not sourced yet | — |
| Rate quality | 8.0 | not sourced yet | not sourced yet | — |
| Governance & transparency | 8.0 | not sourced yet | not sourced yet | — |
| Coverage | 7.0 | not sourced yet | not sourced yet | — |
What we liked, and what fell short
Liked- Every asset gets its own market with contained risk
- Enables lending against assets no shared pool would accept
- No protocol-level loss event to date
Fell short- Liquidity is fragmented across many small silos
- Long-tail markets can be thin enough to make liquidation difficult
Why the marks landed where they did
Shared lending pools socialise the consequences of one bad listing — the mechanism behind Venus's 2021 failure and several others. Silo's answer is that every asset lives in its own silo, paired with a bridge asset, so risk cannot propagate between markets.
How isolation works in practice
Each silo contains one collateral asset plus bridge assets such as ETH or a stablecoin. A depositor in the ETH-USDC silo has no exposure to a silo containing a volatile long-tail token, regardless of what happens there. That means genuinely risky assets can be supported as collateral without threatening conservative depositors, which no shared pool can do.
The liquidity cost
Fragmentation is the direct trade-off. Each silo has its own depth, and thin silos are harder to liquidate: if a position goes underwater in a market with little liquidity, liquidators may not be able to clear it at the modelled price. The risk is contained, not eliminated.
Record
No protocol-level loss event since 2021, with audits in place and a design whose failure modes are enumerable — which is itself a security property.
Who should use it
Borrowers wanting to use collateral that shared-pool protocols will not accept, and depositors who want exposure limited to specific assets they have chosen. Users lending blue chips will find deeper liquidity and better rates at Aave or Morpho.
FAQ
What is a silo?+
An isolated lending market containing one collateral asset plus bridge assets, so risk cannot propagate to depositors in other markets.
Why does isolation matter?+
In a shared pool, one bad collateral listing can create bad debt for everyone. Isolation confines that outcome to the people who chose the risky market.
What is the downside?+
Liquidity fragments across many small markets, and thin markets can be difficult to liquidate cleanly when a position goes underwater.
Has Silo been exploited?+
No protocol-level loss event since its 2021 launch, with audits in place.
