Updated: Dec 21, 2019
Launched in 2017, Salt is a platform facilitating the lending and borrowing of cash using their cryptocurrencies as collateral. It stands for Secured Automated Lending Platform and proposes providing blockchain-backed loans to its users. It provides loans that use Ether, Bitcoin, Litecoin, Dogecoin, Crypto, and Dash.
The first in its concept, Salt argues that the cryptocurrency portfolio is ideal to be used as collateral since it exists in a transparent peer to peer framework with efficient storage, liquidation, and transfer option, which operates on a trusted secure environment open to the public. This element lowers the risk involved with instances of fraud as well as the operating costs.
What Is Salt Designed For?
Salt is a token for the SALT platform. It is essentially a lending platform that permits its members to secure loans in cash against their blockchain assets. It aims at being the future of monetary transactions. Its primary focus is to provide blockchain asset holders a platform to collateralize their holdings against cash loans. It is the first lending platform that is asset-backed and provides its users access to liquidity without having to convert or sell their blockchain securities.
Salt follows the conventional lending method but secured by non-conventional collateral, thereby providing an extended outlook to the most basic function of crypto lending and borrowing for liquidity. It provides its users a secure and original prospect to lend in alignment with a growing asset portfolio through a collateralized debt. This introduces a fresh level of versatility to the blockchain security holders worldwide.
The belief ingrained within Salt is to revolutionize the outlook towards digital assets to a more conventional asset lending structure, making money more effective and accessible for the digital framework.
Who Is the Team Behind Salt?
The concept of Salt was initiated by Blake Cohen and was officially launched in Aug 2017, when it provided its first loan against blockchain security. The most prominent member of its team is Erik Voorhees, CEO of Shapeshift, who is the director of the board.
Blake Cohen is a former real estate executive based out of Denver, Colorado.
Erik Voorhees is a member of the Cryptocurrency Advisory Board at MGT Capital Investments, Inc. since June 2016. He is also the founder and CEO of Shapeshift and was the co-founder of the Bitcoin Company Coinapult. Apart from this, he is also the founder and co-owner of SatoshiDICE.
Salt raised about $50 million in its ICO and its total team has increased from 5 to 25 with a user base of over 50,000 over the world.
How Does Salt Work?
Salt provides its users with the opportunity to raise cash loans without the hassle of liquidating their digital assets, extensive documentation, and a prolonged period. This loan can then be utilized without reservations or restrictions for any purpose desired by the borrower.
It functions based on a multi-signature wallet and is built on an ERC-20 smart contract. This enables the users to hold, access, evaluate, and operate an account for their securities in line with the ongoing market trends. Though the platform allows participation by its members the membership can be bought at a nominal cost.
The users have a simple application process with very minimalistic formalities and procedural requirements. The approval is fast and easy since there is no credit rating necessity, and the specified loan amount is deposited directly into the designated bank account.
The team is responsible for matching the borrowers with the lenders. It evaluates the collateral value and matches that with an appropriate lender in its network. The digital collateral is safely retained in a secure architecture that has systematic periodic audits to ensure a safe transactional environment.
What are Current and Future Applications of Salt?
Users need to obtain Salt tokens (SALT) to be able to participate and acquire loans. The borrowing limit is also proportionate with the user’s token spending.
Another advantage of Salt is that it facilitates a fast, efficient and no transaction fee asset liquidation without having to break any investments made. Evaluation is based on the collateral being provided and not on the credit scores of the individual. This allows for lower costs with a real value attached to the blockchain security being provided hence saving on the tax being payable as well.
The concept of Salt holds great potential. They have expanded to 35 states in the US. However, even though Salt rose in popularity as an innovative breakthrough in financial transactions, a lot of factors played in contributing to its current stagnation.
There was poor communication, lack of transparency, erratic crypto price fluctuations and frequent changes in their goal posts that made the conditions very unfavorable for Salt. They were also not able to keep up with the growing demand for loans and their inability to meet these demands led to a standstill in the membership count.
The hope for them to overcome these potential threats and issues remains dim and the future of Salt, as an investment yielder is very suspect until they overhaul their technology and policies to overcome the issues currently faced.