Silo V1 Review 2026: Risk-Isolated Lending Markets

Silo V1 is the first generation of Silo Finance, a non-custodial lending protocol described as creating permissionless and risk-isolated lending markets. It has been listed since August 2022 and has a native token, SILO.

The protocol runs on Ethereum, Arbitrum, Optimism, Base and Sonic. Total value locked is about $728,000, which is small by lending-protocol standards, and it slipped roughly 6.9% over the past week.

The app homepage shows Explore, Earn, Borrow and Portfolio sections plus a V3 option, which indicates the project has moved on to a newer version. Anyone looking at V1 should treat it as a legacy deployment and confirm which markets are still active.

Silo is a lending protocol where users deposit crypto to earn interest and others borrow against collateral they supply. Everything runs through smart contracts, so no company holds your funds on your behalf.

The defining idea is isolation. Instead of one large shared pool where every asset backs every loan, each market is separate. A problem in one market, such as a collateral token losing value faster than liquidations can handle, stays inside that market rather than hitting lenders elsewhere.

Borrowers must post collateral worth more than the loan. If the collateral value drops too far, the position can be liquidated to repay lenders. Interest rates adjust with market conditions, and the details differ by market.

Silo does not publish a fee schedule on its homepage. As in most lending protocols, borrowers pay a variable interest rate, lenders earn a share of it, and you also pay the network gas fee on whichever chain you use.

Current borrow and supply rates are shown for each market in the Explore, Earn and Borrow sections of the app. Check those figures and any protocol fee before opening a position.

Silo is non-custodial, so the main risks are in the smart contracts and the markets rather than in a company holding deposits. Two audits are listed, but the homepage does not name the auditors or publish reports, so readers should look up the details themselves. Audits reduce risk but do not remove it.

Other risks include oracle errors, liquidation shortfalls in thin markets, and exposure to volatile or low-liquidity collateral, which is possible in permissionless markets. The team, licensing and any past incidents are not described. Separate unrelated products also use the name Silo, so make sure you are on the correct app address.

Silo V1 is for experienced DeFi users who are comfortable managing collateral, tracking liquidation levels and reading market-specific risk. It is less suited to beginners or to anyone who needs deep liquidity for large positions.