Thank you for the kind words @cp0x, and that is a great question. We looked at whether Silo generated net new or cannibalistic growth in two ways.
When the STIP launched and Silo activity initially increased, the impact was a similar magnitude growth in total Arbitrum lending. This leads us to reasonably conclude that the pie grew and Silo’s growth was incremental for the Arbitrum ecosystem.
Plotting total lending on Arbitrum of all protocols excluding Silo below, confirms that Silo’s growth did not negatively impact other ecosystem protocols at all. We conclude that no protocols displayed any material negative response to the launch of Silo’s STIP incentives and early rapid growth.
As the STIP evolved, Silo’s growth shifted towards WETH borrowing against Pendle PT tokens and LST/LRTs. No other lending protocols offer Pendle PT collateral markets so this growth came about through bootstrapping a fresh use case. The other major lending protocol offering LST and LRT collateralized markets is Aave, which grew its lending similarly over the period, as seen in the chart above. We conclude that the incentives allowed Silo to bootstrap activity, and offer users a segregated pool alternative without any signs that the growth came at the expense of other protocols.