Silo protocol guideCore model

Dynamic liquidity for tokenized markets.

Silo is a dynamic liquidity protocol built for tokenized assets. It gives liquidity providers, market makers, issuers, and protocols a programmable place to supply onchain assets and stablecoins, facilitate trading, and earn fees from market activity.

The core ideaTokenization creates the asset. Silo creates the market around it.

What Silo does

Bringing an asset onchain does not automatically make it liquid. Holders still need secondary markets, stablecoin pairs, efficient execution, trading depth, and infrastructure that lets capital gather around useful prices. Silo is designed to provide that liquidity layer.

Tokenized stocks are an important initial use case, but they are not the full scope. The same framework can support tokenized ETFs, Treasuries, funds, private credit, commodities, and other real-world assets as compatible markets develop.

The gap between issuing a token and having a market for it is wider than it looks. An issuer can mint a tokenized share and distribute it, and holders will still find that nobody is quoting a price, that selling any meaningful size moves the price against them, and that the token trades at a discount to the asset it represents for no reason other than the absence of a counterparty. Liquidity is not a property a token has. It is a service somebody provides, and it has to be paid for.

That payment is the trading fee, and the people earning it are the LPs who commit capital to sit in the market and take the other side of trades. A liquidity protocol is the machinery that makes the arrangement work without either side trusting the other. It holds the inventory, prices the trades, collects the fee, and keeps an accurate record of who is owed what. Silo is that machinery, specialized for assets whose price is anchored to something happening outside the chain.

Liquidity is the product

Silo organizes capital into programmable markets where onchain assets can be exchanged.

LPs supply the capital

Users, market makers, issuers, protocols, and treasury capital can contribute liquidity.

Trades generate fees

Trading activity pays fees that accrue primarily to active liquidity providers.

Why discrete bins

A constant-product pool spreads capital across every price from zero upward, which means most of a deposit sits at prices the market will never visit. Silo divides the price space into discrete bins instead, and lets a liquidity provider choose which of them to fund. The difference is not cosmetic. It changes where capital sits, how execution behaves, and how much attention a position needs.

Capital placementLiquidity is funded per price level rather than spread across an unbounded curve.

Execution inside a binA bin holds a single price, so a trade that fits inside it fills at that price and pays only the fee.

Position shapeA position is a distribution across bins, which can be even, weighted toward the market, or entirely one-sided.

ManagementChoosing a range means the market can leave it, so placement becomes a decision an LP revisits.

The cost of that design is that placement becomes a real decision. In a constant-product pool an LP deposits and is finished, at the price of earning very little on most of the capital. In a binned market an LP earns considerably more on capital that is positioned well, and nothing at all on capital the market has walked away from. The protocol does not make the choice easier by hiding it, because the choice is what determines the outcome.

This is also why these pages spend more time on ranges, composition, and repositioning than on deposit mechanics. Depositing is trivial. Deciding where to deposit, and knowing what the position will hold when the market moves somewhere unexpected, is the part that decides whether the position was worth opening.

Who Silo is for

The same market serves four kinds of participant. Each one arrives with a different asset, a different time horizon, and a different reason to care about where liquidity sits.

Liquidity providers

Holders of a tokenized asset or a stablecoin who want deposited capital to earn a share of trading fees.

Market makers

Professional participants who manage ranges actively and keep inventory on both sides of the market.

Issuers

Teams that mint a tokenized asset elsewhere and need a secondary market to exist around it.

Protocols and treasuries

Organizations holding assets on a balance sheet that can support a market instead of sitting idle.

These four are not separate audiences with separate products. They meet in the same market and depend on each other in a particular order. An issuer needs LPs before its token is tradable at all. LPs need trading volume before the fees justify the risk they are carrying. Traders need depth before the market is worth using, and depth exists only because LPs put it there. A market that fails usually fails because one link in that chain never formed, not because the mechanism was wrong.

How to read these docs

Every page carries a label next to its number saying which part of the protocol it covers, so a reader can tell market structure from interface behavior from the rules governing how numbers are presented.

Core modelThe market structure this documentation describes.

Core experienceThe LP and trading flows the interface is built around.

Market designFee behavior, reference data, and the controls built on them.

Market scopeThe asset classes a market can be built around.

Data policyRules for how numbers must be measured, labeled, and shown.

Where to start

1
Understand the market
Read how a Silo market works, then liquidity bins for the structure underneath it.
2
Pick a behavior
Liquidity strategies turns bin placement into shapes you can reason about.
3
Supply or trade
Providing liquidity covers the LP flow; trading covers execution.
4
Read the numbers correctly
Metrics and analytics and risks should be read before any capital moves.