What is Salt (SALT)? The ultimate guide

Your guide to SALT. An explanation of the blockchain-based lender

SALT screen on mobile phone                                 
The SALT lending platform allows borrowing against cryptocurrency assets. Photo: Shutterstock


Founded in 2016 by real estate expert Blake Cohen, the cryptocurrency Salt Lending (SALT), an acronym for Secured Automated Lending Technology, allows individuals to leverage their crypto holdings to secure fiat loans. As part of the growing DeFi lending market, Salt Lending has garnered significant attention. So how does it work?

SALT coin explained

The blockchain-based SALT Lending allows individuals who own crypto to use that crypto as collateral to take out a loan. Users can use a combination of accepted crypto coins and token, rather than just having to deposit it all using one. Accepted tokens include Bitcoin (BTC), Ethereum (ETH), Doge (DOGE), Litecoin (LTC) and SALT (SALT).

In return, they can get access to loans either in fiat currency or in stable coin.

SALT was launched with the goal of creating a product that allowed users to capitalise the value tied up in their crypto rather than selling it. SALT was the first cryptocurrency-backed loans provider on the crypto market. Since its emergence, the DeFi lending market has grown exponentially.

How does SALT work?

Described on the platform’s website as “A loan designed to help you HODL” (that is, in cryptojargon, hold your cryptocurrency for an extended period), Salt offers a range of different kinds of loans with different types of interest. Furthermore, unlike traditional loans, SALT loans do not take any credit score into account when creating the terms of the loan.

Its customer base ranges from retail clients to hedge fund firms. The platform offers personal loans as well as larger business loans, to be used for everything from paying off a credit card to re-investing in crypto assets, the point of salt (SALT) is to allow individual retain and capitalise off their assets.

Loans start from $5,000, while the terms of  loans range from three to 12 months.

The maximum loan-to-value (LTV) ratio varies from 30% to 70% and, unlike more traditional loans, there are no origination or prepayment fees. While borrowers' credit scores are not checked, individuals have to go through Anti Money Laundering (AML) and Know Your Customer (KYC) processes.

There are a number of risks which borrowers should be aware of. Crypto prices can be very volatile, meaning that if the asset the borrower uses as collateral decreases significantly, the borrower may have to deposit additional crypto assets to further secure the loan.

If, however, the price of the asset increases, then borrowers can get more funds from the lender or use the additional proceeds to pay off the loan quicker.

What is Salt (SALT) coin?

SALT, an Ethereum-based ERC-20 digital asset token, is the native token of SALT Lending. SALT has several functions. The native coin can lower the interest rate of a loan, and also used to make up to 20% of collateral portfolio when securing the loan.

On top of this, SALT coins can be used to pay any fees related to services or products. Lastly, SALT can also be used to pay back the interest on your loan.

There is a total supply of 120 million SALT coins and a current circulating supply of 73.9. million. 18,858 SALT coin cryptocurrency coins have so far been burnt.

4.88 million tokens have been redeemed on SALT’s platform while 1.41 million have been used as collateral thus far.

SALT cryptocurrency surged dramatically after it was first issued in 2017.

From $2.25 on 1 November 2017, the SALT coin hit record high $17.22 on 28 December of that year.

After peaking, the coin dropped in value to less than $1, where it has remained up until now. SALT coin hit its lowest ever price on 13 December 2019 of $0.0417.

It is currently priced at $0.1604.

Dismal performance

The coin has fallen by nearly 5% over the last year and nearly 30% in the last month. Compared to other cryptocurrencies it has arguably fared dismally.

This can, in part, be ascribed to the fact that the crypto community lost trust in SALT after it went quiet between May and September 2018, having become overwhelmed with $1.3bn in loan requests in early 2018.

As a result of this backlog of requests, the platform suspended “new membership registrations, loan requests and purchases of SALT.”

These scaling issues, which placed the start-up close to collapse, no doubt caused distrust in the platform, making it easier for competitors to rise and take the market share.

In September 2018, SALT attempted a comeback, claiming operations were up and running once again and announcing expansion into new states in the US and internationally.

With chief executive officer Shawn Owen replaced by Bill Sinclair, the previous chief technology officer of SALT, and Nexo, a European competitor, offering to buy out SALT Lending’s portfolio, the drama continued.

It’s no surprise that, given the levels of competition in the market, borrowers can be picky when choosing platforms, only plumping for ones that they trust 100%. Given the dramatic past, clearly reflected in the price of SALT coin, it is safe to say the platform has not quite managed to imbue the crypto community with the enthusiasm it once had for the offer.

There is a total supply of 120 million SALT coins and a current circulating supply of 73.9. million.

Salt is regulated in many countries and fully licensed. It has established a solid reputation as a lending platform as, relatively speaking, it has been around a long time.

It is worth remembering, however, that the industry as a whole is still nascent and regulation is an ongoing conversation.

SALT is available on some, but not all, crypto exchanges. While we don’t have it on currency.com yet, we will let you know when we do. Just remember that cryptocurrencies can be volatile, and prices can go down as well as up. Furthermore, regulation, especially around crypto lending platforms is constantly changing, so this may affect the future price of SALT.

Always remember to do your own research and never invest more money than you can afford to lose.

Further reading:

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