@SiloFinance

One hidden assumption in DeFi credit markets: deep DEX liquidity must already exist before credit markets can scale. Most lending protocols depend heavily on secondary liquidity for liquidations, meaning new assets often require mature external markets (DEXs) before meaningful credit expansion becomes viable. Silo v3 explores a different direction through dual liquidation paths: • DEX liquidations when secondary liquidity exists • Collateral distribution to lenders as a fallback when DEX liquidations fail Combined with isolated markets, this creates an interesting path for bootstrapping credit markets around new onchain assets with intrinsic value, including RWAs. Teams may not need to heavily subsidize DEX liquidity purely to ensure liquidations can execute during stress events. Learn more about Collateral Distribution (CDS) 👇

Managed Vaults are live on Silo v3 on @XDCNetwork via @nine_summits More isolated lending opportunities ahead with lender-first protection Explore live yields below 👇

1/ Most DeFi lending offers capped upside with hidden tail risk You earn small yield when things go well, but can lose heavily when liquidations fail. That’s not just “market risk.” It’s how most lending protocols are designed. https://t.co/vH5lAXUWST

🔜 @megaeth https://t.co/vF9yEZ5fST

1/ During the rsETH situation, one factor quietly prevented a bigger mess: Borrow rates — the speed at which debt grows. Not risk isolation. Not liquidations.