SALT Lending has a tremendous amount of credibility in the crypto lending space, as the company was one of the first of its kind to be created back in 2016. The platform has its own native token and provides lending opportunities for users of a variety of different crypto assets. This platform includes a number of additional features that make it easy for users to track their crypto portfolio and make sure that their funds are safe.
By: Kyle Torpey | Jul 10, 2020 | Modified Jul 15, 2020
|Max interest available||n/a|
|Proprietary credit card||No|
|Minimum loan amount||$5,000|
|Maximum loan amount||Depends on jurisdiction|
There has been plenty of hype around the idea of decentralized finance over the past couple of years. Centralized solutions like SALT Lending still have an important role to play in the cryptocurrency ecosystem. It provides a service to those users who are looking for loans in USD, and are cryptocurrency holders. SALT is one of the original examples of a platform where cryptocurrency users could borrow against their crypto holdings.
SALT Lending began as an innovative platform with its own native token in the emerging space of crypto finance. The utility of SALT tokens is now related and applicable only to members and can be used to pay for memberships and gain other perks on the SALT platform.
Taking out a loan on SALT Lending works in a manner similar to any other crypto lending platform. First, the user must create an account and provide some personal identification in order to verify their account. Once an account has been created, the user also has the option to add up to six additional business accounts to the same email address.
After their account is verified a user is able to deposit their cryptocurrency of choice to use as collateral for their loan. The current list of accepted crypto assets to use as collateral include: Bitcoin, Ether, Bitcoin Cash, Litecoin, Dash, Dogecoin, Ripple, SALT, USDC, PAX, TUSD, and PAX Gold.
Interest rates for crypto-backed loans from SALT Lending start at 5.95%. However, there is no predetermined or set rate for loans on this platform. The rate of interest attached to your loan will be determined by the lender who is contributing capital and will also depend on current market conditions.
Your loan to value ration will affect how much you are able to borrow on this platform. Users will be warned about potential margin calls before any liquidation event actually takes place. A first alert will be sent to the user once the loan to value ratio reaches 75%. A forced liquidation event will only take place once the loan to value ratio reaches 90.91%.
There is no way for a normal user to earn interest via the SALT Lending platform. If you are looking for a way to earn a return on your cryptocurrency holdings, then you will need to look at Crypto.com, BlockFi, Compound, or one of the many other crypto lending platforms that support this sort of functionality.
In addition to its base lending platform, SALT Lending also offers a portfolio management tool that makes it easy for users to manage all of their cryptocurrency holdings in one location. Additionally, the real-time notifications available with this platform make it clear that users will be notified as quickly as possible in a situation where they need to add more collateral to back their outstanding loans. These notifications are sent out via SMS text, email, phone call, and push notifications. The push notifications are enabled by the mobile SALT Lending applications available for Android and iOS.
While the SALT token was originally a key, differentiating aspect of the SALT Lending platform, the token’s utility is chained to the members of its platform. The token used to be necessary in order to purchase a membership on the SALT Lending platform, but that is no longer the case. As stated on their website: “The SALT Membership is a consumptive use product it is not intended for speculation we do not pursue listing it on exchanges, because it does not hold rights or claims to intellectual property, other property, or cash flows. The SALT tokens intended use is on our platform only where Memberships can be used for goods and services provided by the company”
One final extra feature of the SALT Lending platform that should be covered is the extensive insurance offered by the company on crypto assets that are used as collateral for loans. Crypto collateral is held in cold storage, and those crypto holdings are 100% insured against crime. This is a rather impressive amount of insurance to be offering, as many institutions only offer insurance coverage on cryptocurrency held in hot wallets. Of course, users are still on the hook for their own losses in a situation where the loss is due to user error or delayed repayment.
SALT Lending was founded in 2016 and completed an ICO in 2017. During the ICO, the company was able to raise nearly $50 million, but this process eventually led to an investigation from the SEC in the United States. Now, the SALT token is solely for the use of memberships benefits.
The SALT Lending platform itself went live near the end of 2017.
The lending rates offered by SALT Lending are comparable to the rates found on other lending platforms; however, the fact that there is a $5,000 borrowing minimum could be a deterrent to many users with relatively low cryptocurrency holdings.
The SALT token acts as a utility token for the SALT Lending platform. The SALT tokens intended use is on the SALT platform only where Memberships can be used for goods and services provided by the company, as stated on their website.
Yes, SALT offers comprehensive insurance to its users for their crypto collateral. The level of insurance provided to users is likely the greatest single feature for SALT, although users must still be able to secure their own accounts and watch out for margin calls in order to avoid losses.
No, you cannot earn interest in an account on the SALT Lending platform. You can only borrow against your crypto assets.
You cannot lend cryptocurrency to other users via SALT. The best cryptocurrency to use as collateral depends on a variety of factors, but stablecoins are a solid option as they avoid volatility, which means margin calls are less likely.
If the crypto assets you are holding as collateral for your SALT Lending loan decline in value, you will need to add more collateral to the platform in order to avoid a margin call. The best option for adding more collateral to back a loan will be a stablecoin, as this sort of digital asset will help guard against future price declines that require even more collateral to be added in the future.
It should be noted that you should receive a number of notifications from SALT Lending before a margin call on your collateral actually occurs.
SALT Lending is available to residents of the United States; however, the platform is not yet available in all states around the country. In addition to the United States, SALT Lending is also available to users in Bermuda, Brazil, New Zealand, Hong Kong, United Arab Emirates, United Kingdom, Vietnam, and Switzerland. SALT Lending is focused on adding many more countries to their platform in the near future.