Decentralized lending protocol Silo has released a V3 version upgrade with a new bankruptcy protection mechanism designed to reduce reliance on decentralized exchange (DEX) liquidity. When external liquidity is insufficient, the protocol can absorb collateral at a discount into the loan assets to repay lenders. The protocol offers two liquidation paths, with the new protection measures activated only when DEX liquidity is inadequate. This upgrade aims to protect lenders and unlock new collateral types such as LP tokens and liquid staking assets.

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