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2021 has been a good year for Silo Protocol thus far. First, the project was the winner of the ETHGlobal 2021 Hackathon, one of the most coveted titles for upcoming blockchain projects. Following this major win, the project is now looking to expand on its operations through a token sale to raise funds along with upcoming projects for 2022.
Silo Goes on Sale
Silo is a non-custodial lending protocol that is used to implement inclusive yet isolated money markets. Its permissionless protocol also allows for a market to be created for practically any token and allows its users to borrow against any asset of their choosing.
As part of the Silo Protocol’s expansion plans, a sale will be held from December 6, 2021, at 3:00 PM UTC to December 9 at 3:00 PM UTC. During this sale, which will be conducted on Gnosis Auction, 10% of the Silo Protocol’s token supply will be up for auction.
The funds raised from this sale will be distributed in a number of ways; 85% of it will remain in the DAOs treasury and its future use will be decided by the community and the remaining 15% will be used for development purposes throughout the ecosystem.
According to the management of the Silo Protocol, the reason why Gnosis Auction was chosen compared to other alternatives was that its current price mechanism is fair and prevents rug-pulling and also because it features a single clearing price for all assets which means bidders can pay less for an asset. Furthermore, bots can be prevented from mass buying and diluting the integrity of the sale.
This emphasis on community interaction is at the core of Silo Protocol’s operations. As Aiham Jaabari, a found contributor of Silo, puts it, “Unlike ICOs of 2017, where funds raised went to the company developing the protocol; The Protocol Owned Liquidity raised by Silo is always in control of the community. The community, therefore, can direct it to achieve sustainable growth of the protocol. Strong DAOs establish a culture of togetherness, fairness, and transparency, and we think auctioning off tokens on Gnosis Auction where the entire community establishes a fair value for the project is the first step to building such a culture; for Silo DAO.”
2022 and Beyond
The token sale is not the only development that Silo Protocol users can look forward to; the project has announced plans to launch its money markets in 2022 that will serve all crypto assets. This will be done by leveraging its permissionless, risk-isolating protocol.
It has also been emphasized that this money market will not suffer from the sale pitfalls that plagued first-generation crypto lending markets. One of these is the issues of shared pools that often have exploitable assets and in the past, major lending protocols have suffered from malicious attacks as a result.
How Silo Protocol goes around this is that rather than having multiple assets in a single pool, individual pools are created for each asset and ETH acts as the ‘bridge’ asset, in the same vein as platforms like Uniswap. This way, any risk involved is limited to a single pool and the ecosystem is all the better for it.
While some other protocols have tried to solve this issue in the past, they either created individual pools for pairs of tokens or multiple pools of different tokens, which does not solve the issue entirely. However, Silo Protocol’s current system does.
Following the token sale and ecosystem development, crypto users will then be able to access next-generation lending markets in a way that is safer, more efficient, and more equitable.
