Not content with reimaging DeFi lending once, Silo is preparing to do it all over again. V1 of its lending and borrowing protocol introduced risk-isolated markets, ensuring that cross-pool contagion, in which a single incident affects all users, was impossible. V2, recently launched, offers fresh possibilities by allowing third-party devs to create fully customized lending solutions using hooks.

The risk-reduction that has long been Silo’s selling point hasn’t been diminished – in fact with V2 it’s stronger still. But this time around, the real attention-grabber is the flexibility that V2 brings in, allowing anyone to create their own lending market with filters fine-tuned, paving the way for all manner of innovation.

With V2, any crypto asset can have a lending market, paving the way for all kinds of experimentation, while allowing DeFi projects to extend the utility of native tokens. This gives communities an incentive to hold for the long term without locking up all their precious capital. The first network where Silo has elected to launch its V2 protocol is Sonic.

Sonic Gets the Lending Protocol It Deserves

Sonic is an EVM, but not just any EVM – it’s a supercharged, high-speed EVM that until recently was an FVM. The FVM was designed by Fantom as the successor to the FVM, but then they decided to rebrand as Sonic and stick with the EVM – or did they commission a new EVM? Whatever the case, Fantom is now Sonic, it’s ultra-fast, and in Silo it’s got the lending protocol it deserves. Silo is a good fit, taking advantage of Sonic’s high throughput and low fees and combining them with the risk-isolated pools that are now Silo’s stock in trade.

Not only does Sonic now have Silo to cater for its DeFi lending and borrowing needs, but it’s got a highly versatile risk-isolated protocol on its chain. Silo’s decision to deploy V2 on Sonic ahead of the other chains where it’s also purposed – like Ethereum, Arbitrum, Base, and Optimism – is telling. It’s a sign that Silo likes what Sonic is cooking up on its chain, particularly the ability to confirm transactions with rapidity and at extremely low cost.

Hooked on Lending

One of the biggest changes that V2 of Silo’s protocol introduces is hooks. These aren’t designed for DeFi users – at least not in their raw form – but for devs, who can use them to create bespoke lending solutions. In practical terms, hooks allow builders to create highly customizable lending pools and markets. From determining the collateral assets to setting the lending terms, there’s a whole lot that can be done with hooks.

Silo will naturally be eager to showcase the versatility of hooks, not just on Sonic but on all the EVM chains its V2 protocol supports. V2 already has well over $200M in TVL and has been rising steadily for the past month. Silo’s long since demonstrated that risk isolation should be the default model for DeFi lending, preventing protocol-wide failure in the event of something going wrong. It’s now intent on showing that it’s equally capable of innovating in other areas by making V2 fully composable, customizable, and capable of elevating onchain lending to the next level.

Source: Finance Magnates