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SALT Lending Review
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 provides lending opportunities for users of a variety of different crypto assets and 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.
In mid-2022, BnkToTheFuture (an online investing platform) bought SALT Lending for an undisclosed price. This marked a significant moment in the development of both companies, as well as the blockchain industry as a whole given the destabilizing effect the recent crypto bear market has had on crypto lending platforms.
- One of the premier cryptocurrency lending platforms
- Track all your cryptocurrency assets in one place with built-in portfolio
- Offers high level of insurance for stored funds
- Earn crypto rewards by paying off your loan with StackWise feature
General Overview
Pros
SALT Lending provides comprehensive insurance coverage for its users
Monitor the health of your loan with an easily understood loan health indicator
Multi-signature and cold storage security
Earn crypto rewards on your loans with StackWise feature
Cons
Minimum loan amount is $1,000
No interest-earning accounts available
What is SALT Lending?
There has been plenty of hype around the idea of decentralized finance over the past couple of years but entralized solutions like SALT Lending still have an important role to play in the cryptocurrency ecosystem.
SALT Lending is a crypto-backed loan platform that offers loans in both fiat and digital currencies. It is one of the few platforms that allows users to collateralize their cryptocurrencies to obtain a loan in either USD, TUSD, or cash.
The process to get a loan for various purposes on SALT is pretty simple. You start by creating an account and completing the identity verification process. Then you customize your borrowing preferences and submit a loan application. As collateral, you get to deposit your digital assets into a multi-signature SALT collateral wallet. Once your application is approved, you will receive TUSD or USDC in your account.
Simply put, SALT’s lending services offer crypto holders an easy way to borrow against their portfolio of assets. The platform offers a starting LTC from 20% to 70% with terms from 12 to 60 months.
Some of their extra features that we will discuss in this review include a “Stabilization” feature that lets borrowers preserve the value of their crypto portfolio even during a bear market as well as the “StackWise” program that lets users receive a portion of their loan repayments in crypto rewards.
Crypto Loans
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 or USDC.
Interest rates for crypto-backed loans from SALT Lending start at .52%. 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%. SALT has a feature called stabilization where if the LTV surpasses 90.91% the remaining assets will be converted to USDC to preserve value.
Does SALT Offer Interest-Earning Accounts?
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.
SALT Extras
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.
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’s Stabilization features
As we mentioned earlier, one of the unique features of SALT is its “Stabilization” feature. This allows borrowers to keep their loan-to-value ratio (LTV) at a constant level even during a bear market.
To do this, they use a smart contract that automatically adjusts the collateral requirements based on changes in the price of the underlying asset. This way, borrowers don’t have to worry about their loan being called in during a market crash.
This feature is triggered when a borrower’s LTV reaches 90.91%. The smart contract automatically converts the borrower’s portfolio to its stablecoin (USDC) equivalent to preserve the value of the collateral and provide more options in managing the loan. There is a 5% fee applied to the collateral during the stabilization process.
Borrowers are also given the option of managing their LTV to 83.33% or lower by depositing more collateral or paying down the loan. The borrower can then convert the collateral back to the asset mix after the market resumes its uptrend.
The Stabilization feature is a great way for borrowers to protect their loans against a market crash. However, it should be noted that this does not guarantee that the borrower will not have to sell their assets at a loss if the prices continue to fall.
History of SALT Lending
SALT was founded in 2016 but the lending platform kicked off in mid-2017 with a $48 million ICO that generated quite a bit of excitement in the crypto community. The project was able to raise funds from some high-profile investors such as Peter Thiel’s Founders Fund, Tim Draper, & Blockchain Capital.
The platform initially started as a way for users to collateralize their Bitcoin and Ethereum to obtain a loan but has since expanded its services to include other digital assets such as Litecoin, Monero, & Dash.
The company has been quite successful in its short history. In November of 2017, they closed a $4 million seed round led by Blockchain Capital. This was followed by a $12 million Series A in March of 2018.
The most recent funding round was led by Galaxy Digital Ventures, the digital assets merchant bank founded by billionaire hedge fund manager Mike Novogratz. The $20 million Series B was completed in September of 2018 and valued the company at over $100 million.
Mobile App
SALT has a mobile app that is available on both Android and iOS devices. The app allows users to track their portfolios, check their loan status, make payments, and more.
The app is well-designed and easy to use. It is a great way for borrowers to stay on top of their loans and manage their account while on the go.
SALT's StackWise Rewards
SALT’s StackWise allows users of the platform to get a portion of their monthly payment back in crypto rewards. This is a great way to encourage users to stay on the platform and continue using its services. Users can even choose the type of cryptocurrency they receive as a reward with BTC, ETH, and USDC as the main options. The StackWise program offers up to 9.04% in cashback rewards.
SALT Frequently Asked Questions
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.
