Silo has announced the start of its Genesis Token Auction in order to decentralize its protocol and increase Protocol Owned Liquidity for its Decentralized Autonomous Organization (DAO).
The Token Auction will take place on Gnosis Auction from December 6, 2021, at 3:00 PM UTC to December 9, 2021, at 3:00 PM UTC.
According to Aiham Jaabari, one of the Silo’s founding contributors, “Unlike previous ICOs in 2017, where funds raised went to the company developing the protocol, the Protocol Owned Liquidity raised by Silo is always in the hands of the community.” As a result, the community can direct it in order to achieve the protocol’s long-term growth. Strong DAOs foster a culture of togetherness, fairness, and transparency, and we believe that auctioning off tokens on Gnosis Auction, where the entire community determines a fair value for the project, is the first step toward fostering such a culture; for Silo DAO.”
The Silo team has also announced that Silo’s secure money markets will be available in early 2022. It will use its permissionless, risk-isolating protocol to bring money markets to all crypto assets. Although first-generation lending markets such as Aave and Compound are efficient, they expose users to unwelcome risks because shared-pool markets can contain exploitable assets that affect all assets in those markets. CREAM Finance and Venus have both been victimized by exploits in the past for the same reason.
Silo approaches money markets in a unique way. Silo has created one pool for each token rather than a single pool for all tokens. Every pool is restricted to a single unique token, with ETH serving as the bridge asset. To use token “A” as collateral to borrow token “B,” a user must move the bridge asset between Silo pools, similar to how Uniswap trading pools work. Pool B’s only counterparty risk will be ETH, not token A.
Silo creates risk-isolating lending markets for every token by isolating the risk of all tokens to one pool and connecting the pools using ETH as bridge assets; any token can serve as collateral.
Specifics about the Genesis Token auction
Silo is holding a public token auction. It will be held on Gnosis Auction. The auction will provide the community with 10% of Silo’s token supply. All proceeds from the auction will be divided into two categories:
- Approximately 85 percent of the funds will be held in the DAO’s treasury and managed by the community through governance (Protocol Owned Liquidity).
- The remaining 15% will be used as a development fund for Silo Protocol operational expenses such as security services, payment to contributors, infrastructure services, and so on.
Why did the Silo team select the Gnosis auction?
Because of the benefits, the team chose the Gnosis Auction over other available options such as Balancer LBPs. Gnosis Auction provides additional benefits in addition to ensuring fair pricing and eliminating the possibility of rug-pulling. It enables the auction to end with a single clearing price for all tokens, regardless of how much the winning bidder bids.
The implication is that if a bidder offers $5 per token and the clearing price is $1 per token, the bidder will only pay $1 per token. Bots are not permitted to purchase tokens, and token distribution is fair and relaxed due to the user-friendly bidding process.
Silo is a non-custodial lending protocol capable of establishing safe, efficient, and inclusive money markets. It implements isolated money markets, with each Silo containing only two assets (a unique token and the bridge asset). Silo is a permissionless protocol that allows any user to create a token market. Silo, as a non-custodial lending protocol, lets users borrow against any cryptocurrency asset.