Salt Cryptocurrency: Your Guide To Investing

SALT, an acronym for Secured Automated Lending Technology, is a blockchain-based lending platform that offers cryptocurrency-backed loans. Users can deposit any combination of accepted tokens as collateral, such as Bitcoin, Ether, Litecoin, and Doge, to receive a loan in the form of a fiat currency or stablecoin. SALT's lending platform allows members to leverage blockchain assets to secure currency loans, aiming to provide a cryptographically secure and automated system. The minimum loan amount is $1,000, and loans can be used for any purpose, such as buying a car or paying off credit card debt. SALT also offers business loans.

SALT membership and requirements

SALT is a global investment platform that connects institutional asset owners with asset managers and technology entrepreneurs. It was founded in 2009 by SkyBridge Capital and now operates as a standalone entity. SALT hosts flagship annual conferences in North America, Asia, and the Middle East, partnering with leading regional institutions. These events aim to facilitate relevant, curated connections for institutional asset owners to each other, fund managers, and technology companies.

SALT's primary focus is to help institutional investors (such as sovereign wealth funds, government pensions, endowments, foundations, and family offices) connect with asset managers and company founders.

To invest in SALT cryptocurrency, you can purchase its native token, which is an ERC-20 token issued on the Ethereum blockchain. The SALT token has multiple functions, including reducing interest rates on loans and serving as a secondary form of loan collateral. It is currently redeemable at a $7.50 value for interest rate reductions, although this policy is subject to change.

SALT Lending offers cryptocurrency-backed loans, where users can deposit a combination of accepted tokens (such as Bitcoin, Ether, Litecoin, Dogecoin, DASH, or SALT) as collateral to receive a loan in fiat currency or stablecoin. The loan amount is determined by the available crypto collateral, and borrowers can choose from multiple cryptocurrencies to secure their loan.

SALT also provides a custody framework for safekeeping crypto assets, ensuring reliable access to assets and secure transfer and storage of collateral.

SALT's loan-to-value (LTV) ratios

SALT Lending is a blockchain-based lending platform that offers cryptocurrency-backed loans. Users can deposit any combination of accepted tokens, such as Bitcoin, Ether, Litecoin, Dogecoin, and Dash, as collateral to receive a loan in the form of a fiat currency or stablecoin. SALT Lending has a native token, called SALT, that can be spent to reduce the interest rate on a loan and can be used as a secondary form of loan collateral.

One of the key features of SALT Lending is its Loan-to-Value (LTV) ratios. The LTV ratio represents the amount of loan a borrower can access relative to the value of their crypto collateral. SALT offers LTV options ranging from 30% to 70%. For example, if a borrower has $100,000 worth of crypto assets as collateral, they can obtain a loan of up to $70,000 (at 70% LTV). The specific LTV ratio chosen impacts the interest rates and loan repayment terms. SALT allows borrowers to set their LTV at 20%, 30%, 50%, or 70%reduces the risk of liquidation. If the value of the collateral decreases, the LTV ratio will increase. If the LTV ratio exceeds certain thresholds, a margin call process is initiated. SALT's margin call process provides borrowers with warnings and opportunities to take corrective actions, such as adding more collateral, before any liquidation occurs.

Additionally, SALT Lending offers rewards and incentives for borrowers who maintain lower LTV ratios. Through the StackWise Rewards program, borrowers with lower LTVs can earn rebates in the form of BTC, ETH, or USDC deposits into their accounts. These rewards can be used to manage the LTV of the loan, make further payments, or be traded or sold as desired.

In summary, SALT's loan-to-value (LTV) ratios provide borrowers with flexibility in accessing cash loans while using their crypto assets as collateral. The LTV ratios impact interest rates and repayment terms, and maintaining lower LTVs can lead to rewards and reduced risks of liquidation.

SALT loan length, interest, and fees

SALT Lending offers crypto-backed loans with no credit checks, allowing borrowers to access cash without selling their crypto assets. The platform offers low APRs and minimal fees, with no charges for withdrawals, custody, prepayment, or origination.

SALT Lending offers two types of loans: personal and business, with minimum borrowing amounts of $1,000, contingent on your location. The platform provides flexible loan terms, with options to set your LTV at 20%, 30%, 50%, or 70%, and repayment terms of 12, 36, or 60 months. The APRs vary based on the LTV, terms, and any rewards from the StackWise program. For example, a $150,000 loan at a 50% LTV paid over one year with principal and interest payments requires $300,000 in collateral, with an advertised APR of 3.82%.

SALT Lending also offers the StackWise Rewards program, which provides rebate-like BTC, ETH, or USDC deposits into the borrower's account when they make loan payments. Additionally, the platform has a stabilization feature to protect borrowers during market downturns. If a borrower's LTV exceeds 90.91%, SALT will convert the collateral to USDC to maintain value, with a 5% stabilization fee charged.

It is important to note that SALT Lending paused withdrawals on its platform in November 2022 due to the FTX bankruptcy, and new loan originations are currently paused until further notice.

The benefits of SALT loans

SALT Lending is a unique crypto-backed loan platform that allows users to borrow in fiat or digital currency, using their crypto assets as collateral. Here are some of the benefits of SALT loans:

• No Credit Check: SALT loans do not require a credit check or credit score, as the crypto assets used as collateral can be liquidated if the borrower defaults. Eligibility is based on the value of the borrower's blockchain assets.
• Maintain Ownership of Crypto Assets: SALT loans allow borrowers to maintain ownership of their digital assets while gaining access to cash. Borrowers can benefit from any increase in the value of their crypto holdings while also obtaining cash for other purposes.
• Competitive Rates: SALT offers competitive interest rates compared to traditional lenders, with rates ranging from 0.95% to 9.99% depending on the loan term and LTV.
• No Origination or Prepayment Fees: SALT does not charge any origination or prepayment fees, making it more affordable for borrowers.
• Easy and Quick Approval: The loan approval process is simple and fast, with most loans approved within 24 to 48 hours.
• Comprehensive Insurance: SALT provides comprehensive insurance coverage for its users' crypto collateral, including cold storage and insurance against theft and crimes.
• Stabilization Feature: SALT's stabilization feature helps borrowers maintain their loan-to-value ratio (LTV) during market downturns, preventing their loans from being called in during a market crash.
• Flexibility: SALT offers flexible repayment options, including monthly, biweekly, weekly, and fortnightly payments.
• Track Crypto Portfolio: SALT provides a portfolio management tool that allows users to track their crypto assets in one place.
• No Impact on Credit Score: Since SALT loans are asset-backed, they have no impact on the borrower's credit score.
• Global Presence: SALT is available in several countries, including the United States, Brazil, the United Kingdom, and Hong Kong, making it accessible to a wide range of users.

The risks of SALT loans

While SALT loans offer a unique opportunity to access cash without selling your cryptocurrencies, there are several risks to consider. Firstly, pledging cryptocurrency as collateral is highly risky due to the volatile nature of the crypto market. If the value of your crypto assets drops significantly, you may face a "collateral maintenance call", similar to a margin call, requiring you to deposit additional crypto assets or pay down a portion of the loan. This could result in losses if you are unable to meet the call.

Secondly, SALT loans are subject to margin calls during market downturns. If your crypto assets decline in value, triggering a margin call, you will be given the opportunity to add more collateral before SALT liquidates your loan collateral. However, if you are unable to meet the margin call requirements, your collateral may be liquidated, resulting in potential losses.

Thirdly, SALT loans have a relatively small window for repayment, and the platform charges higher repayment rates compared to traditional loans offered through bank accounts. This can increase the financial burden on borrowers, especially if they are unable to make timely payments.

Another risk to consider is the requirement to provide extensive personal information on the SALT Lending platform. As a centralized platform, SALT Lending collects identifying information to meet Know Your Customer (KYC) requirements, which may be invasive for users who value anonymity.

Lastly, SALT Lending has faced regulatory issues and was caught up in the collapse of the FTX exchange in 2022, which led to a temporary pause on deposits and withdrawals. This incident highlights the potential risks associated with the platform's operations and underscores the importance of conducting thorough due diligence before investing.

Frequently asked questions