Under the $141 million liquidation crisis, Silo is on the path of renewal!

In June 2024, Michael Egorov, the founder of Curve Finance, came under scrutiny due to a debt issue amounting to as much as $100 million.
The risks exposed by Egorov's extensive leveraged trading revealed vulnerabilities in Curve Finance's risk management, leading to significant losses in its liquidity pools. Many investors and partners expressed concerns about the future of Curve Finance, which also had a profound impact on other projects within its ecosystem, including Silo Finance.

Silo Finance is a platform focused on decentralized finance (DeFi), featuring secure and efficient cross-chain lending solutions.
One of its core functions is Isolated Lending, which allows users to isolate assets with specific asset pools (such as Ethereum, Polkadot, or Bitcoin networks), thereby reducing risk and increasing asset management flexibility.
Through Isolated Lending, users can choose different asset pools for borrowing based on their needs while maintaining the security and liquidity of their assets. The platform design of Silo Finance aims to provide a secure and low-cost trading environment for global users and is committed to promoting the development and innovation of decentralized finance.
During the Curve liquidation crisis, Egorov pledged a large amount of CRV as collateral across multiple lending protocols, borrowing substantial amounts of stablecoins (mainly crvUSD). His borrowing accounted for over 90% of the market share in protocols like Llamalend, which concentrated his financial risk on a few platforms. Silo was one of Egorov's largest sources of borrowing.
However, when faced with the decline in CRV prices and the liquidation of his positions, Egorov remained calm and did not take measures to add collateral, even finding time to self-deprecate and interact with other users on social media, raising market doubts about whether he was using the lending platform to sell CRV tokens for cash.

The lending platform Arkham pointed out that Egorov's borrowing positions had been warned of potential liquidation risks months earlier, leading the community to question whether Egorov was cashing out CRV through the lending platform.
It is worth noting that Egorov has pledged a large amount of CRV across multiple lending protocols to obtain stablecoin loans, facing long-term borrowing risks. Similar liquidation warnings had previously occurred, but no proactive measures were taken. Among them, Silo was one of Egorov's largest sources of borrowing.
Silo has attracted attention due to its open liquidation mechanism and high-risk collateralization of CRV. Egorov's debt on Silo is considered one of the core issues of his crisis. Although he used loans from the platform to maintain his positions, this practice sparked widespread discussion about market transparency and the effectiveness of lending mechanisms.
This risk event not only exposed issues regarding Egorov's personal financial stability but also subjected the price of the Curve protocol and its CRV token to uncertainty. Although Egorov has taken measures to alleviate pressure by selling some tokens and implementing other actions, the market remains cautious, worried about the potential long-term impact of his future liquidation risks on Curve.
Reactions in the industry to the Curve Finance financial crisis vary, but most opinions focus on the following key issues:
First, risk management and lending strategies.
The event revealed vulnerabilities in DeFi platforms regarding fund management and lending strategies, particularly their inadequate response to market volatility and fund withdrawals. These issues prompted the industry to reassess its risk management frameworks and asset allocation strategies, emphasizing the importance of robust operational models and risk control measures.
Second, platform transparency and communication strategies.
Some viewpoints highlighted the critical role of platform transparency and communication strategies during crisis events. Successful crisis management relies not only on technical and financial measures but also on timely and transparent information disclosure to maintain user and investor trust and support.
Third, the stability of the DeFi ecosystem.
The event underscored the structural challenges and market risks faced by the rapidly developing DeFi ecosystem. The industry calls for enhanced regulatory compliance, technological innovation, and market transparency to promote the long-term healthy development of DeFi and the protection of user assets.

Summary
This incident inevitably brought certain impacts to Silo, as Egorov faced financial pressure due to extensive leveraged trading, raising concerns about the safety of funds in its core liquidity pools, which in turn triggered worries among investors and users.
In this context, Silo Finance had to quickly adjust its risk management strategies and asset allocation. This includes strengthening internal audits and monitoring mechanisms to ensure that potential risks can be identified and addressed more promptly in similar events.
At the same time, Silo Finance may strengthen cooperation with other DeFi platforms to diversify its liquidity and funding sources, thereby reducing the risk associated with a single platform. Although Silo Finance has already implemented strict measures in its platform design and risk management to ensure the safety and reliability of user funds, as a cross-chain platform, its close ties with other DeFi projects make it difficult to completely escape the negative impacts that the Curve Finance incident may bring.
Nevertheless, the Silo Finance team and community remain proactive and have taken effective measures to stabilize and restore the operation of their platform. They are maintaining their reputation and user trust in the industry by enhancing risk control and transparency, as well as strengthening cooperation and communication with other DeFi platforms. This positive response not only demonstrates the professional capabilities of the Silo Finance team but also strengthens its position and influence within the DeFi ecosystem.