xSILO

xSILO: The Reward and Governance Token of the Silo Protocol

xSILO serves as the reward and governance token for the Silo Protocol. Its primary functions are to facilitate reward distribution from the SiloDAO and to provide holders with governance rights.

xSILO Overview

xSILO is a liquid staking derivative of SILO tokens staked in the xSILO staking module. It earns auto-compounded rewards from protocol revenue distributions and redemption fees. Implemented as an ERC-4626 contract, xSILO accrues yield based on an Index Ratio.

Staking Module

Staking

Users can stake SILO to receive xSILO, making them eligible for SiloDAO rewards. The amount of xSILO received is determined by the current Index Ratio, which reflects the yield accrued by xSILO holders. For example, an xSILO:SILO ratio of 2 means 1 xSILO can be redeemed for 2 SILO.

Redemption

xSILO can be redeemed for SILO over a variable vesting period to realize accrued rewards. The amount of SILO received is calculated using the current Index Ratio multiplied by a Redemption Factor (ranging from 0.5 to 1), which depends on the chosen vesting period. The Redemption Factor increases linearly from immediate redemption (0.5) to a 6-month vesting period (1). For instance, with an xSILO:SILO ratio of 2 and a 4.5-month vesting period, 1 xSILO would redeem for 1.5 SILO.

Rewards Module

Buybacks

The Silo Protocol allocates 50% of its revenue to buy back SILO tokens from the open market. These tokens are then distributed to the xSILO staking contract, increasing the xSILO:SILO ratio.

Early Redemptions

When users redeem xSILO for SILO before the full 6-month vesting period, they receive fewer SILO tokens relative to the Index Ratio. The unclaimed SILO is redistributed to the xSILO staking contract, further increasing the xSILO:SILO ratio.

Cross-chain

xSILO is minted on Sonic but can be bridged to/from Arbitrum and Ethereum via Chainlink Transporter Bridge. https://app.transporter.io/?tab=token&token=xSILO