Imagine for a second that you bought Bitcoins back in 2010, only to sell your entire holdings in early 2017. You may not have wanted to do so, but you were compelled to do it because you were dire need of cash. Now imagine how it must have felt to watch Bitcoin soar by more than 15 times in value, shortly after you sold your holdings. If only there was a way to get access to hard cash without having to sell your cryptocurrency assets, life would be far more convenient.
Well, that is where SALT comes in. SALT, short for Secured Automated Lending Technology, is a membership-based lending platform where you can get access to loans by using blockchain assets as collateral. Before you get confused with the terms ‘blockchain assets’, just remember that it is a fancy way to say cryptocurrency (since almost all cryptocurrencies out there are built on blockchain technology).
And yes, you have read it right. As long as you have cryptocurrencies like Ether, Bitcoin, Litecoin, et cetera, you can use them as collateral to secure cash loans on SALT platform. This cash will be deposited directly into your bank account and can be used for any purpose - buying a car, going on a vacation, renovating your house, or pretty much anything. Essentially, if you are a holder of cryptocurrencies and are seeking cash without wanting to liquidate your holdings, then SALT is for you.
A paradigm shift from traditional lending
In many ways, SALT is set to revolutionise the lending industry. Instead of relying on traditional collaterals like stocks, real estate, and gold, borrowers can now secure loans on the back of their blockchain assets. SALT platform enables borrowers to access cash loans through its extensive network of lenders.
Furthermore, loan approvals with SALT are not subjected to credit checks or creditworthiness of the borrower. SALT recognises the potential of the borrower’s blockchain assets and makes the credit history irrelevant. This is definitely a drastic improvement over the conventional way of borrowing funds, which depends heavily on the credit score of the borrower.
In short, if you use SALT platform to borrow cash, your credit history and credit score will not be impacted in any way whatsoever. The only thing that matters here is the value of your blockchain assets. However, SALT will undertake Anti-Money Laundering (AML) and Know Your Customer (KYC) verifications before processing a loan request.
The quantum of the loan depends on the value of the collateral/blockchain assets. The interest rate levied on your loan is set by the lender who is contributing the funds which, in turn, depends on many factors. Additionally, there are no prepayment fees to consider here. As the borrower, you must first approve the lending rate before accepting the agreement. Once the loan agreement is accepted, the following steps take place:
- Creation of the Loan - The borrower sends his/her blockchain assets to the SALT collateral wallet, and in turn, funds are transferred directly to the borrower’s bank account. Keep in mind that during the tenure of the loan, collateral remains the property of the borrower and any rise or fall in the price of the cryptocurrency asset belongs to the borrower.
- Repayment of the Loan - The borrower makes timely repayments (principal + interest) to the lender. If the borrower misses a payment, SALT will automatically liquidate a portion of the blockchain asset to cover the missed payment and any related fees. If payments are missed on a monthly basis, then the collateral will be liquidated to cover principal, interest, and fee payments.
- Completion of the Loan - Once the loan is repaid in full, the collateral is returned to the borrower.
You can monitor all the relevant information regarding your loan on SALT’s interactive platform. This displays information like amount outstanding, amount due, due date, interest, et cetera.
Throughout the tenure of the loan, the blockchain assets will still be owned by you. You can sell them whenever you see fit, but you need to keep in mind that any outstanding loan amount, including the fees and interest, will be first deducted from the price of your asset and repaid to the lender. Only then will you have access to the remainder of the funds from the sale of your cryptocurrency asset.
What is SALT cryptocurrency?
To utilise the services of SALT platform, borrowers must first purchase SALT membership which has different levels, depending on the maximum quantum of loan. If the maximum sum that you are looking to borrow does not exceed $10,000, then you can go for the ‘Membership’ plan. If you need to borrow more, then you can either consider ‘Premier’ or ‘Enterprise’ plan.
You pay for these membership plans with SALT tokens, which can be purchased either on the SALT platform or on any of the numerous cryptocurrency exchanges. You can think of SALT tokens as the fees that you need to pay to utilise the services offered by the lending platform.
Where to buy SALT tokens?
SALT platform is still relatively new and is in its early operational stages. For the time being, it is available only in the United States but the company has plans to expand its operations and services. Secondly, SALT tokens are like Ether - they hold value only on their respective platforms. Therefore, it is hard to predict if SALT tokens will follow the typical cryptocurrency path and swell in value.
Nonetheless, you can buy SALT tokens on Changelly, Shapeshift, Binance, and Coinspot cryptocurrency exchanges. You can also purchase SALT on the official website of the lending platform - saltlending.com.
In which wallet should you store SALT tokens?
SALT smart contracts are operated and executed on Ethereum Blockchain. This means that any wallet that is compatible with Ethereum should be able to hold SALT tokens as well. Some of the popular wallets which serve this purpose have been categorised as follows:
- Desktop - Exodus, Jaxx, Armory, Blockchain Wallet, et cetera
- Mobile - Bread, Jaxx, Blockchain Wallet, Coinomi, Mycelium, et cetera
- Hardware - Ledger, Trezor, KeepKey, et cetera
It is impossible to mine SALT tokens. SALT platform has released the tokens with a limited supply of around 120 million of which, a little over 50 million are in circulation at the moment.
SALT Cryptocurrency Price Trends
The price of SALT token witnessed a rise similar to that of other cryptocurrencies like Bitcoin, Ether, et cetera. The driving factor behind this surge was undoubtedly the rising popularity of cryptocurrencies in late December 2017 and early January 2018. Towards the end of the year, 1 SALT token was worth roughly 15-16 USD.
Risks associated with SALT cryptocurrency
SALT, by its very nature, has started a dramatic shift from the conventional norms of availing loans. In a world that is becoming increasingly blockchain oriented, SALT has become the first player to realise the potential in blockchain assets-backed loans. However, there is still a long way to go for SALT and it has many hurdles to overcome.
As mentioned earlier, SALT is more like a platform for taking loans backed by blockchain assets. It is not a cryptocurrency per se which aims at becoming the next Bitcoin or as an alternative to fiat currency. Therefore, investing in SALT tokens with the purpose of making a quick buck in a short span of time may lead to less desirable outcomes.
Therefore, from an investment perspective, it is better to consider other instruments like mutual funds , which not only generate steady returns in the long-run, but are also far less vulnerable to extreme volatility witnessed by Bitcoin and its other counterparts.
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