SALT Review - A Revolution For Cryptocurrency Investors

Until now, the only way for cryptocurrency investors to access the value of thier assets was to sell them off.

This isn’t ideal, selling cryptocurrencies incurs fees, taxes must be paid on earnings, and (worst of all) you miss out on any future growth in the currency.

But things are about to change, with SALT Lending’s Blockchain Backed Loans.

SALT’s platform requires an Ethereum based SALT token to gain access to it, but is this token a good currency to invest in?

In this review, I look at what SALT is, how it works, and help you to decide if SALT is a worthwhile investment.

Don’t want to watch? Here’s a summary of the video:

What Is SALT?


SALT is an Ethereum token used to gain membership to the SALT Lending Platform.

This platform allows for ‘Blockchain Backed Loans’, where holders of blockchain assets can put their blockchain assets up as collateral for a cash loan. This means they’re able to access some of the value of their holdings without having to sell any of their tokens, so they don’t miss out on it’s future growth.

Because users are putting their assets up as collateral, there’s no credit checks necessary. Anyone owning digital assets can have access to cash through SALT, provided they have SALT tokens to gain membership to the service. Meanwhile, the risk that lenders are exposed to is reduced because of this collateral. If the borrower fails to make payments, or they try to run away with the cash, the lender can liquidate the holdings to get their money back.

How SALT Works


The Lending Process:

  1. Lenders on the platform post terms they’d be willing to lend at. Members looking to borrow can select which loan’s terms best suits them.

  2. Borrower sends blockchain assets to SALT’s secure, multi-signatory collateral wallet, where they’re stored for the duration of the loan. The Lender transfers funds to the borrower’s bank account. Right now, borrowers can use their Bitcoin, Ethereum, and Ripple holdings as collateral, and can receive cash in a range of fiat currencies including US Dollars, Euros, and Pounds. It seems likely that SALT will be expanding this offering in the future.

  3. Borrowers make a series of monthly payments to repay the loan. Once the loan is repaid in full, their assets are returned to them.

SALT’s Collateral Wallet:
The wallet used by SALT is designed to be capable of holding any blockchain assets.

Four individuals will hold private keys for this wallet: the borrower, the lender, a third party custodian, and the SALT Oracle.

For funds to be moved out of the wallet, at least three of these parties must allow it. This ensures the borrower’s funds are safe throughout the duration of the loan.

It should also be noted that throughout the duration of the loan, the ownership of the collateral remains with the borrower.

Changes in Value:
Cryptocurrencies are always fluctuating in value.

This could result in issues for the borrower or lender, but SALT has designed their service to reduce the affect of changing value.

Firstly, the loans are overcollateralised, meaning the value of assets is greater than the value of the loan.

Then, throughout the loan’s life, the SALT Oracle monitors the value of the collateral, and as well as the repayments made by the borrower.

There are, of course, two possible ways the collateral’s value could change: it could decrease or increase.

Decreasing Value
If the value of the collateral falls below an agreed upon amount, the Oracle triggers a maintenance call to the borrower. The borrower is told to either deposit additional collateral, or make a cash repayment.

If the borrower is unable, or chooses not, to make payment, the Oracle triggers a liquidation order. With the lender and custodian’s permission, a portion of the holdings will be sold off, again returning the loan-to-collateral ratio to its initial state.

After this, the borrower continues to make their monthly payments as before, and there may be further maintenance calls if the value of their asset’s drops further.

Increasing Value
Of course, there’s also a good chance that the value of the assets increases.

In this case, there’s two possibilities that could happen.

  • The borrower could add the increased value to the loan, receiving additional cash from the lender.
  • The borrower could withdraw the excess collateral from the wallet.

Which of these scenarios plays out depends on the original terms of the loan.

If the borrower is unable to increase their cash loan, but they want to do this, they can pay off the loan early (not facing any early repayment fees as a result of this) and open a new loan for a greater cash sum.

The Team


The team here looks fantastic.

It’s already a sizeable team, and they’ve been adding new members since SALT’s creation.

There’s a number of impressive team members here, most notably Erik Voorhees, the CEO and Founder of ShapeShift. He’s a pretty well known name in the cryptocurrency space, and you may well recognise him from the Banking on Bitcoin documentary.

It’s also great to see that the team has a number of members working on the technology and product, which is probably the most important aspect to focus on.

I won’t go into too much detail here, but if you’re interested definitely check out the team here: https://www.saltlending.com/about.

Social Media


Unfortunately, SALT doesn’t have the strongest social media presence. This is a shame as marketing through social media can be useful in attracting new users to the service.
However, their presence isn’t bad, and they only launched recently so there’s still time to improve.

Issues


Whilst everything so far has sounded pretty good, I have a number of issues with SALT.
There are a few minor issues, but there’s one large problem that just kills the possibility of investing in SALT for me.

That issue is that I don’t see the value of tokens increasing. Or, at least, I don’t expect to see any dramatic increase in their value.

The tokens don’t really do much. They’re just access tokens used to gain membership to SALT. As soon as a user makes their payment to join the SALT Network, the token will be sold on to the next person.

And, even if the SALT team held some of the tokens back to drive up the price a little, it’s not in their interest to let it get too high. They don’t want membership prices to rise too high and put potential customers off.

And finally, there’s 120 million SALT tokens. Even if many of users buy the most expensive, enterprise level membership to the platform, there’s unlikely to be enough tokens taken off the market to create scarcity.

Conclusion


So, SALT sounds like a brilliant idea. It solves a problem that many people in the cryptocurrency space currently face, and there’s a brilliant team backing it up. I’m fairly confident that the SALT platform will do well in the future.
But the SALT tokens just don’t make a good investment.

Maybe the token value will increase a little, but I can’t help but think that there’s a number of far better investments to make that will result in far, far greater gains.

Of course, this is just my opinion, and yours may differ, and I’d love to know your thoughts on SALT and it’s future prospects.

Thank you for reading and watching, I hope this has been useful for you.


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9 Likes

i just started investing in SALT.

A while back I read some reddit guy who sold all his BTC to completely pay for his mortgage making him debt free. Many people were bewildered why he would sell his BTC since BTC was still very bullish around 10K at the time.

If he had used SALT, he would have been able to keep his BTC that would have appreciated much more by now and be mortgage-free.

It’s a great idea and makes sense. They will be delivering the platform soon, hope it lives up to the hype.

2 Likes

It sounds like a good idea, but since crypto kitties we know that ethereum sucks.

4 Likes

I am super bullish on SALT and plan to use it’s service, when available. One thing to keep in mind when it comes to future value of the token: Not only will individuals be using their platform, but many blockchain companies will as well. Many of the ICO’s who took in millions in BTC, ETH and LTC need a way to access that money/value with-out having to sell their crypto stack. IMO they will account for 60/70+ percent of SALT users by volume.

As SALT’s product is used and generates fees/revenue (loan origination fees, interest, etc…). The token itself will become more valuable. That is what I think will drive the price.

Even Peter could’ve used their service to buy the Bitcoin Lambo and kept all that BTC…and the Lambo!

I may be wrong, but I for one, own (and will own more) SALT

2 Likes

Salt is now LIVE! Prices going up.

1 Like

Sold my holdings for about 50% profit a couple of days ago. Put it in ICX though so I can’t be too mad

2 Likes

salt is about 10% of my portfolio only. ICX has the lionsshare too amongst alts.

2 Likes

reminds me of buying or selling in a margin account.

1 Like

What do people think about ETHLend? I got into LEND as I thought it had more potential for growth/gains, but I think SALT is more legitimate at this point with the whole lending concept.

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Ethlend is ponzi. It’ll eat your money in due time.

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From where do you derive this opinion?

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great job!! hhdhdhdhdhddhdhd

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What if the collateral’s value plummets to zero as we all understand the volatility of cryto. Then the borrower might not want to pay the rest of the loans to the lender seeing the asset has no value. It would cause a lost to the lender. May I know what is the solution in this problem?

1 Like

For those of you considering taking loans from SALT you should look up the pitfalls of Premium Financing. It’s all well and good until the interest rate changes and your coin underperforms, and it will. Now you’ll have to pay out of pocket for the interest to make this work.

This is nothing new or revolutionary and happens in the everyday world. Reverse mortgages, pawn shops, etc etc… tread carefully.

1 Like

Actually that cannot happen, The SALT Oracle will automatically sell off the [crypto] collateral as soon as the LTV has been breached. That is why it is best to over-collateralize any loan (especially considering the recent drops). I would do 125% collateralization and make sure to add more collateral when the market drops.

1 Like

Alright, I started to look into this for the pub. I requested a sample prospectus so I can read the 1000 page document that tell you where they get you. I will say again, tread carefully and avoid the loans. This is basically a payday loan shop for crypto.

Please heed my warnings before considering loaning your crypto. Investing in the coin, well I couldn’t tell you the answer but Payday loans are successful, and also the scum of the earth.

There is a reason companies ask you if your investment came from a loan and most places will not accept them. Bad, bad , bad, bad idea.

I did find this on their website

All loans are subject to review and approval. For example, a one year $10,000 loan with a rate of 10.00% APR would have 12 scheduled monthly payments of $880. Annual percentage rates (APRs) through SALT vary. Eligibility is not guaranteed, and requires that a sufficient pool of liquidity is available to fulfill your request and that you meet other conditions. Individual US citizen borrowers must be a permanent resident and at least 18 years old. Valid bank account and social security number/FEIN are required. Refer to The Membership Agreement and The Subscriber Agreement for details and all terms and conditions. Borrowing against collateral entails risk and may not be appropriate for your needs. Salt Lending does not provide legal or tax advice. Please consult your advisor.

SALT Lending’s notes are issued pursuant to a Prospectus. You should review the risks and uncertainties described in the Prospectus related to your possible investment in the notes. Not FDIC-insured; investments may lose value; no SALT or bank guarantee.

3 Likes

@Peter_Rehm would like this.

I started a topic on this company a few weeks ago. Go to the SALT Loans discussion area. I am in the process of talking with the senior management of SALT to get some answers to the questions posted in that thread.

2 Likes

Will continue over there and will leave this open for the investors in the coin.

After reading your posts there it seems we’re on the same page.
Discussion continued here in regards to the lending aspect of SALT.

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Ghadeer,

One of the open questions with these guys is what Loan-To-Value (LTV) they will give you on the assets pledged. They may only offer you a 50% LTV. These guys are among the few doing this. The rules are just now being written.

Actually, does anyone know of any other “Uncoventional or Non-Conforming Financing” sources out there actually accepting crypto as collateral?

2 Likes

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