Summary
- Pool Address: Balancer
- Official Channels: www.linktr.ee/SiloFinance
Protocol Description
Silo is a lending market that allows users to lend and borrow any asset in a risk-isolated way through the use of a bridge asset design. Our largest liquidity pool sits in the SILO:FRAX Curve Factory pool. The pool is incentivized with ~130k protocol-owned vlCVX (half of SiloDAO ~260k holdings).
Token holders currently passed a proposal to allocate ~130k vlCVX to incentivize SILO:ETH Balancer pool. The core team will use ~130k vlCVX to collect bribes, sell them, and use proceeds to bribe veBAL holders.
Motivation
SiloDAO originally purchased ~260k CVX with the intention of max-locking and directing $CRV and $CVX emissions to the SILO:FRAX v2 gauge. The solution has fallen short of the community’s expectation for a few reasons:
- Despite high APY (~130% at peak), we were only able to attract a modest amount of liquidity resulting in high slippage.
- The stablecoin (Frax) pairing may have discouraged LPs from depositing despite high APY.
- Curve factory pools are not mostly read by price aggregators (e.g. CoinMarketcap) or routed through by DEX aggregators (e.g. 1inch).
Activating a gauge for the SILO:ETH Balancer pool will allow SiloDAO to build a primary source of liquidity for our token by incentivizing liquidity. We believe Balancer is far more widely integrated by price and DEX aggregators which makes it a more convenient option. The ETH pairing as opposed to stablecoin exposes LPs to lower IL. Last but not least, once ignited, the Silo’s Tokemak reactor can direct liquidity to the Balancer pool once the integration between the two protocols happens.
Specifications
- Governance: Provide current information on the protocol’s governance structure. Provide links to any admin and/or multisig addresses, and describe the powers afforded to these addresses. If there are plans to change the governance system in the future, please explain.
Silo is operated as a DAO and governance decisions are completely decentralized. Holders can create proposals, create snapshot votes to gauge temperature, and vote on Tally for on-chain decisions.
- Oracles: Does the protocol rely on external oracles? If so, provide details about the oracles and their implementation in the protocol.
Silo lending protocol currently uses Uniswap v3 and Balancer v2 oracles in order to read asset prices. This is required to gauge lending parameters such as LTV and Health Factors to allow liquidation of undercollateralized positions.
- Audits: Provide links to audit reports and any relevant details about security practices.
Our audit reports from ABDK and Quantstamp as well as a Certora Formal Verification Report can be found here https://silopedia.silo.finance/security/audits-and-formal-verification
- Centralization vectors: Is there any component of the protocol that has centralization vectors? E.g. if only 1 dev manages the project, that is a centralized vector. If price oracles need to be updated by a bot, that is a centralized vector. If liquidations are done by the protocol, that is also a centralization vector.
No, token holders fully control both the DAO and its lending contracts.
- Market History: Has the asset observed severe volatility? In the case of stablecoins, has it depegged? In the case of an unpegged asset, have there been extreme price change events in the past? Provide specific information about the Balancer pool: how long has it been active, TVL, historical volume?
Our Balancer pool is Balancer. It had at most $50k TVL whilst the majority of our liquidity was on Uniswap v3 and Curve v2 although we aim to make Balancer our primary liquidity pool through incentives. $SILO is an unpegged asset and has faced similar price volatility as other assets, experiencing significant upward price action with the tail-end of the bull-market in April 2022 before crashing a significant amount with the recent downtrend.
- Value: Is this pool intended to be the primary source of liquidity for the token(s)? If this is not the case, explain the expected value add to Balancer (can this pool generate consistent fees?)
Our Balancer SILO:ETH pool will be incentivized with an equal value of bribes as our SILO:FRAX pool on Curve v2 (both will receive ~130k vlCVX in votes or bribe-equivalents). Given our protocol had just launched to the public this week, we expect trading volume to pick up rapidly as our token gains utility.
We will reassess the value of bribes:liquidity between SILO:ETH on Balancer and SILO:FRAX on Curve v2 and will happily add more incentives to Balancer if it is shown to be cost-effective.
Note: Please ensure the owner of your pool on Ethereum is set to 0xba1ba1ba1ba1ba1ba1ba1ba1ba1ba1ba1ba1ba1b If this is not done, please clearly explain why in your proposal.
Gauge: 0xC545aa66cdd9Cf172568dC8ebFdDa1CE9a60e0CB