When I began to get involved with cryptocurrencies, my first instincts were to allocate as much of my portfolio as possible toward blockchain projects. After regaining my rationale and realizing the volatility of the market, I didn’t do so. But, like the rest of the Hodlers in cryptocurrency, I began to incrementally add to my crypto bags as I researched and delved deeper into projects. One disadvantage of owning cryptocurrency that quickly made itself apparent to me is the lack of adoption and breadth. This leaves those funds subjected to few outlets that accept them for transaction. Today’s society is certainly not cheap, and general costs of living may prevent individuals from converting assets to cryptocurrency, so many prefer to keep fiat for practical purposes. To alleviate this problem, the SALT Lending Platform aims to give value to cryptocurrency holders’ latent capital. Through membership on the platform, users will be able to leverage their blockchain assets in exchange for cash loans.
The SALT token is viewed as a “membership unit”, and is an Ethereum-based ERC20 smart contract. To become a member of the SALT lending platform, one must simply own SALT. The SALT token acts as both a medium for purchasing membership and as a means of payment for products and services on the platform. Of the initial 120,000,000 SALT units created, 45% went to discounted sales, 15% to platform development, 2% to an employee discount, and 38% to retail sales.
As an early advocate of bitcoin, the SALT platform’s CEO, Shawn Owen, has as much as 7 years of experience in the cryptocurrency realm. He is a fierce entrepreneur, and along with CTO, Bill Sinclair, who has over 20 years of software development experience, the team is both determined and capable. In addition, Erik Voorhees, the SALT platform’s board director, is well known in the cryptocurrency space as the founder of ShapeShift, Coinapult, and Satoshi Dice.
Recently, CEO Shawn Owen left the project, replaced by CTO Bill Sinclair who will operate as interim CEO. Many have claimed that this reveals an “exit scam” on Owen’s part, however the project is largely unaffected by this event.
The goal of the SALT Lending Platform is to, “facilitate the creation of lending agreements, secure and monitor the value of the blockchain assets acting as collateral, and automatically enforce the terms of each smart contract credit agreement.” Lending agreements are the contracts forged between lenders and borrowers within the SALT membership network. These contracts allow lenders (often larger institutions wishing to loan national currencies to crypto-holders) to fully customize the agreement - selecting for size, type, length and risk tolerance as seen fit. Lenders, like borrowers, also purchase SALT tokens as membership fees to the platform. As an additional note of scalability and flexibility, the platform will allow for the lending of any currency, mediated by SALT membership, which has sufficient demand for lending worldwide. So, essentially, as SALT lending spreads, the platform will expand to suit the lending needs of those with funds denominated in any currency.
When a SALT member wishes to borrow a currency, they enter into a Blockchain-Backed Loan. These loans carry no origination fees, closing costs, or prepayment penalties, and allow members to pay off their loans early at no additional fee. Once members come to a credit agreement, the borrower’s blockchain asset is stored in a fully audited, multi-signature architecture which mitigates risk, automates loan servicing, and streamlines arbitration. SALT’s oracle, a read-write smart contract, considers market prices from exchanges around the world and issues maintenance calls if the blockchain collateral falls in value below a calculated threshold. When called, the borrower can either add collateral, or a portion of the collateral will be automatically liquidated for recalibration. This way, SALT platform borrowers will not have to worry about extraneous fees or losses stemming from negative price action. The oracle also ensures that the entire collateral is returned to the borrower upon full loan repayment.
Though anyone can become a member of the SALT platform by buying a SALT token membership, the team aims to construct value tiers, giving higher paying members access to additional features, such as a hardware wallet, portfolio management, credit and debit cards, or API integration. At the Enterprise level, companies can opt to pay more in SALT in order to use an API subscription service which allows them to offer access to the SALT marketplace to their own customer base. The SALT crypto-secured credit card is one of the project’s more attractive goals, and will allow users to access a line of credit collateralized by blockchain assets, operating on current credit card payment networks with national currencies.
The crypto-collateral model seems promising enough, yet the platform does not stop there. Some other use cases involve integrated leverage, lines of credit for ICOs, and loans to miners. As discussed, when an Enterprise member wants to expose their customer base to the SALT marketplace, they can utilize the API subscription. Leverage, a salient feature of some exchanges, can be included with the API subscription, so that users will not have to interface with the SALT platform itself in order to gain access to leveraged trade capabilities. For ICOs, the SALT platform could be a savior, offering a line of credit to start-ups which would have otherwise been forced to liquidate blockchain assets. Miners, working on proof-of-work blockchain projects, encounter a myriad of costs and expenses in their work. Now, with SALT membership, miners can stake their mined inventory for fiat loans to cover such expenses without selling off their cryptocurrency.
One additional feature of the SALT platform that sticks out as especially helpful in the current economic climate is the SALT Financial Inclusion Initiative. Though many of us involved in cryptocurrency have experience with traditional banking systems, the Inclusion Initiative seeks to provide blockchain backed lines of credit to those who are unbanked or cannot get a line of credit because of social exclusion. The team chose to set aside two percent of total sale proceeds to achieve this initiative, which has the potential to bring economic stability and inclusion to a vast population of unbanked individuals.
Though the project has groundbreaking vision, it has not been dissimilar to other altcoins in terms of delays. According to the roadmap, SALT credit cards should have already been rolled out by Q2 of 2018, with altcoin collateralization coming in Q3 - neither have been seen. However, placing the project into the context of all blockchain endeavors, this teams goals, if/when achieved, will bring a shift to the crypto-sphere, allow for smarter and easier investing, and spread adoption through giving access to the unbanked. Overall, the SALT platform looks like a promising solution to a dilemma that most cryptocurrency investors face at some point.