What is SALT? All You Need to Know About SALT

SALT is a crypto lending platform that allows users to put up their cryptocurrencies as collateral for loans, offering liquidity without selling.

In an era where traditional finance struggles to evolve with the dynamic digital landscape, a significant gap exists in asset-backed credit markets. Despite the growing prevalence of blockchain assets, there’s a stark absence of viable options for leveraging these assets without resorting to liquidation. Traditional financial services, hindered by technological, custodial, and regulatory constraints, find it challenging to navigate a system devoid of centralized oversight. Consequently, blockchain asset holders often have limited borrowing choices in the digital economy. To bridge this divide, SALT (SALT) steps in as an innovative answer.

What is SALT (SALT)?

Founded in 2016 in Denver, Colorado, SALT (Secured Automated Lending Technology) Lending emerged as a revolutionary force in the financial technology sphere. Established by a group of Bitcoin enthusiasts and finance professionals, including Shawn Owen and Erik Voorhees, the company aimed to reshape the way cryptocurrency holders utilize their assets. By allowing users to obtain cash loans using their cryptocurrency as collateral while retaining ownership, SALT introduced a new dimension to asset-backed lending in the crypto market.

In 2017, SALT expanded its reach with an initial coin offering (ICO), allocating about 67% of its token supply to the presale and crowdsale, while the rest remained with SALT Blockchain Inc. However, in September 2020, the company faced a significant hurdle. SALT paid a $250,000 fine and reached a settlement with the SEC over its ICO. This settlement included the public registration of the SALT token as a security under Section 12(g) of the Securities Exchange Act of 1934 and offering ICO purchasers a chance to reclaim their investment.

The company’s journey represents more than just the evolution of a single entity; it’s indicative of the broader wave of innovation following the global financial crisis. The adoption of blockchain technology, which SALT embraced, marked a shift away from traditional financial intermediaries towards a decentralized, secure financial transaction system. Today, as a regulated and licensed company, SALT offers not only crypto-backed lending but also institutional-grade crypto custody and blockchain monitoring products, standing at the forefront of financial innovation.

How Does SALT Work? Blockchain-Backed Loan and Membership Program

Since its inception, SALT Lending has been a trailblazer in the industry of cryptocurrency-backed loans. As per its whitepaper, SALT distinguished itself as the first provider of such loans, carving out a novel niche in the lending market. The company’s regulated status, along with its comprehensive suite of lending, collection, and loan servicing licenses, ensures a secure and compliant environment for leveraging blockchain assets.

SALT’s Blockchain-Backed Loan offers an innovative and flexible solution for borrowers to use blockchain assets like Bitcoin for diverse financial needs, ranging from major purchases to business investments. This approach starkly contrasts with traditional lending practices, which are often encumbered with numerous fees. SALT simplifies this process, rolling all fees into an annual membership to maintain transparency and fairness.

The platform features multi-collateral loans with fixed rates, flexible terms, and multiple loan-to-value (LTV) options, spanning from 30% to 70%. Loans are available in cash or stablecoin, and SALT eliminates common lender charges like prepayment penalties and origination fees. The interest rates are contingent upon the loan term and LTV.

Central to SALT’s service is its advanced protocol-agnostic technology, designed for efficient management of blockchain-backed credit agreements. This includes secure collateral storage within a multi-signature architecture and an automatic collateral management system. The SALT oracle smart contract is a cornerstone of this system, aggregating real-time market price data to manage collateral valuation. If the collateral’s value falls below a certain threshold, the borrower receives a maintenance call notice, offering options to address the shortfall.

In volatile market conditions, SALT’s stabilization process uniquely converts the crypto collateral into a U.S. dollar-based stablecoin, safeguarding the asset’s value and allowing borrowers time to plan their market re-entry. This process, combined with SALT’s loan health notification system, enhances the borrower’s experience by providing security and support.

SALT’s innovative platform and robust technology have positioned it as a leader in digital finance, bridging the gap between blockchain assets and traditional financial systems. By offering secure, flexible, and transparent access to the value of blockchain assets, SALT enables its users to maximize their digital investments effectively.

In addition to its innovative loan services, SALT also offers a distinctive Membership Program. This program is integral to the SALT ecosystem, providing members with additional benefits and enhanced loan terms.

Source: saltlending.com

Membership Program

SALT Lending’s Membership Program is a groundbreaking bridge between traditional finance and blockchain technology, offering a unique platform for both borrowers and lenders. This program enables financial institutions to extend national currency loans to blockchain asset holders without modifying their internal operations or incurring extra costs.

SALT’s platform caters to the increasing demand for blockchain asset-based lending, providing essential processes, compliance, and security. Its extensive lender network ensures Members access to capital as needed. Members choose from various loan types and terms, which are then matched with appropriate lender capital. This system benefits lenders by offering interest on overcollateralized loans managed by SALT’s technology and denominated in their preferred national currency.

The Membership is conveniently purchasable using cryptocurrencies such as Bitcoin and Ethereum, and its price is set in USD and confirmed upon blockchain verification. Different tiers of Membership offer varying levels of access and benefits. The Base Membership provides term financing up to $10,000, while the Premier Membership expands this to $100,000 and includes lines of credit. The Enterprise Membership is designed for larger loans with negotiable terms.

SALT’s Memberships simplify the fee structure, replacing traditional loan-related charges and enhancing transparency. Members can use their SALT tokens to lower loan interest rates, further benefiting from the platform’s flexibility. Overall, SALT’s Membership Program not only integrates blockchain assets into conventional finance but also offers a transparent, secure, and versatile platform for financial growth and stability.

Source: salt whitepaper

SALT Platform Use Cases

The SALT Lending Platform offers diverse use cases, demonstrating its versatility in the blockchain and financial sectors:

• Crypto-Exchange Integrated Leverage: Crypto-exchanges can offer leverage to their clients by integrating SALT’s streamlined API. This allows exchanges to provide leverage terms directly through their interface, using SALT’s extensive lender network for capital arrangement. Exchanges need an Enterprise Membership and to redeem SALT Memberships for API usage.
• ICO Business Development Line of Credit: Startups that have completed a token offering can access working capital loans or lines of credit through SALT’s Enterprise Membership. This enables them to fund business development without liquidating their blockchain assets, paying for various costs in national currencies.
• Miner Working Capital Loans: SALT provides loans to mining operations, helping them manage capital for purchasing equipment and electricity without needing to immediately sell their mining rewards. This optimizes their financial management and timing for selling mined inventory.
• The SALT Network Effect: The platform’s attractiveness grows with its user base, creating a network effect. SALT offers affordable credit access to consumer borrowers and allows lenders to lend against a new asset class. This growing participant pool enhances the platform’s risk models and fosters competitive interest rate dynamics.

The SALT Lending Platform’s diverse use cases highlight its innovative approach to integrating blockchain technology with traditional financial services. A hypothetical growing network of users not only enhances the platform’s functionality and attractiveness but also fosters a dynamic environment where both borrowers and lenders benefit from improved risk models and competitive financial terms. This synergy between technology and finance positions SALT as a pivotal player in the evolving landscape of digital asset management and lending.

Source: saltlending.com

What is the SALT Coin?

SALT Coin is a cryptocurrency used for services on the SALT lending platform. Its fixed supply is capped at 120,000,000 units, all of which are already in circulation (January 2024).

As an ERC-20 token, SALT benefits from the robust security and widespread compatibility of the Ethereum network, where transactions are validated and secured by the blockchain’s distributed ledger technology.

Key characteristics of the SALT Coin include its role in facilitating services on the SALT lending platform. It is used primarily as a means of accessing and paying for these services, including loan origination and maintenance. The tokenomics of SALT allow for its use as collateral in Blockchain-Backed Loan, enabling borrowers to leverage various blockchain assets like Bitcoin, or digitized traditional assets such as digital gold or stocks, without needing to liquidate them.

In the dynamic world of blockchain finance, SALT Coin adds an extra layer of flexibility. For instance, if the value of a borrower’s collateralized asset rises, they have the option to either add this increased value to their loan principal for additional capital from the lender or continue making payments as per their lending agreement. Conversely, if the asset’s value falls, triggering a loan-to-value (LTV) threshold breach, borrowers can respond to a Collateral Maintenance Call by adding more SALT Coin as collateral or making an additional principal payment to rebalance their account.

In summary, SALT Coin not only facilitates access to the platform’s services but also plays a crucial role in the management and operation of loans, offering a versatile and secure way for users to leverage their digital assets.

SALT Main Features

SALT is not just another lending platform; it is a platform that puts borrowers in control. With a unique approach to lending and a range of innovative features, SALT is changing the way people access personal and business loans. Some of its features are:

• Unique Approach to Lending: SALT offers a novel approach to lending, allowing borrowers to access personal and business loans with flexible terms, starting from $1,000. Borrowers can benefit from fixed rates ranging from 15.95% to 19.95% APR with 12-month terms and borrow up to 70% LTV, all without prepayment fees.
• Stabilization for Asset Preservation: SALT’s unique feature, Stabilization, is designed to reduce stress and preserve the wealth of borrowers during market downturns. When a borrower’s Loan-to-Value (LTV) ratio exceeds 90.91%, SALT converts their crypto portfolio to stablecoin (USDC) to protect its value, providing borrowers with more options for managing their loan.
• Comprehensive Loan Health Monitoring: SALT empowers borrowers to monitor their loan health through real-time Loan-to-Value (LTV) ratio tracking. Industry-leading tools enable borrowers to stay informed about risks and opportunities associated with their loans.
• Multi-Blockchain Support: SALT’s Secured Automated Lending Technology supports various blockchain assets, including permissioned distributed ledgers. It utilizes multi-signature smart contracts for collateral management, ensuring secure and transparent transactions on native blockchains.

Incorporating a unique approach to lending, asset preservation, real-time monitoring, and multi-blockchain compatibility, SALT offers a comprehensive suite of features to enhance the lending experience for both borrowers and lenders.

Is SALT a Good Investment?

While SALT offers an intriguing and innovative approach to lending, potential investors should tread carefully due to certain risks. The platform’s unique way of calculating the Loan-to-Value (LTV) ratio and its Stabilization feature are fascinating. Still, the volatility of the SALT token and its collateral tokens can be a concern.

Furthermore, SALT has faced its share of challenges. In November 2022, it temporarily suspended deposits and withdrawals due to the FTX exchange collapse, and its lending license in California was suspended. However, it bounced back with a $64 million capital infusion in February 2023, signaling a commitment to growth.

While SALT has shown resilience, it’s essential for potential investors to carefully evaluate the risks associated with the cryptocurrency market and SALT’s past challenges. Investing in SALT should be done with caution and a clear understanding of the potential risks and rewards.

How to Own SALT?

To own SALT, you can use the services of a centralized crypto exchange. Start by creating a Gate.io account, and get it verified and funded. Then you are ready to go through the steps to buy SALT.

News on SALT

In a noteworthy resurgence, SALT Lending has successfully raised $64.4 million in a Series A funding round, marking a significant milestone for the crypto lending platform. Although this news isn’t the most recent, its impact is still highly notable. Despite the earlier setback due to the collapse of FTX, SALT’s team has demonstrated remarkable activity in recent months, reaffirming their commitment to emerging stronger from challenges. This development underscores the renewed vigor in the crypto lending space, emphasizing transparency and resilience in the face of adversity.

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