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Isolated Pairs

Silo v3 isolates risk at the market level through isolated lending markets.

Each market consists of two single-asset vaults:

  • A vault for the collateral asset (Token A)
  • A vault for the loan asset (Token B)

By design, markets are one-sided. This means:

  • Token A can be used as collateral to borrow Token B
  • But Token B cannot be used to borrow Token A within the same market

Each market defines its own:

  • Risk parameters
  • Liquidation thresholds
  • Collateral requirements

This structure gives users precise control over their exposure.

For example, in a siUSD / USDC market ID 181:

  • Borrowers deposit siUSD as collateral in the siUSD vault and borrow USDC from the USDC vault
  • Lenders supply USDC in the USDC vault and are only exposed to siUSD risk

Token Pairs example

Lenders in this market are not exposed to risks from other markets.

This isolation ensures:

  • Risk is explicit and market-specific
  • Failures are contained within a single market
  • There is no shared systemic risk across unrelated assets

In contrast, traditional lending protocols pool assets together, exposing all lenders to the combined risk of every asset in the system—regardless of what they deposited.