SALT is a blockchain-based lending platform that offers users cryptocurrency-backed loans. The platform allows users to deposit crypto assets as collateral to receive a loan in fiat currency or stablecoins.
Today, we will explore the decentralized lending platform and its native SALT token to determine whether it is a legitimate project.
So, let’s get started.
What is SALT?
SALT is simply an acronym for Secured Automated Lending Technology. The platform founded in 2016 by a group of Bitcoin enthusiasts offers crypto-backed lending facilities and provides crypto investors with a wide range of flexibilities.
According to its whitepaper, SALT was the first provider of cryptocurrency-backed loans and helped create the niche lending market. The regulated company also holds numerous lending, collections, and loan servicing licenses.
What makes SALT Unique?
SALT enables multi-collateral loans at fixed rates, flexible terms, and several loan-to-value (LTV) ratio options. The platform allows for payouts to be made in cash and stablecoin.
The maximum LTV ratio ranges from 30% to 70%, while the interest rates can vary based on the selected loan term and loan-to-value ratio. SALT also functions as a cold storage facility for crypto assets, and issues its native SALT token that users can leverage to decrease interest rates on their loans among other things.
The company offers its lending services to individuals as well as institutional clients such as crypto mining services and hedge funds around the world.
How Does SALT Work?
The SALT ecosystem is designed keeping in mind the extremely volatile nature of the cryptocurrency market. As a result, in the event of a margin call, assets deposited on the platform are automatically converted to a stablecoin instead of liquidation. This is a rather unique feature in the crypto lending space.
Let us explore how it works.
When a loan reaches its forced liquidation LTV, SALT automatically converts some potion of collateral assets into a stablecoin instead of selling the collateral assets to restore the loan’s health, thus preserving its collateral value.
Once the loan’s health has been restored, the borrower can ask to convert the loan back to the asset it was originally collateralized in. This also allows them to convert the assets as the market starts to get back up, creating a scenario where users not only preserve their wealth but also grow it.
Moreover, loans issued by SALT do not require a credit check or credit score for the borrower. This is because the crypto assets used to secure the loan can be liquidated by the platform in the event the borrower fails to repay the due.
What is the SALT token?
SALT is the native cryptocurrency of the SALT lending platform. The ERC-20 standard cryptocurrency is deployed on the Ethereum blockchain, which also supports the crypto-lending protocol.
SALT can be used by customers to decrease the interest rate on their loans. It can also be leveraged as a secondary form of loan collateral.
At the time of writing, SALT is trading at $0.0275 – down over 20% in the last 24 hours. Currently, there are 120 million SALTs in circulation that have a fully diluted valuation of $3.3 million. The ecosystem has achieved a 24-hour trading volume of just $27,525 and has a total market capitalization of $3.34 million.
Is SALT a Real or Fake?
SALT is considered to be one of the first decentralized lending platforms in the world and offers retail and institutional investors cryptocurrency lending services. The biggest advantage the platform has over the traditional banking system is that it offers lending schemes solely based on the collateralized crypto asset and does not require any credit score or credit cheque verification.
The lending facility even allows allows customers to grow their wealth, instead of simply trying to pay off their debt. For example, when the loan is close to being defaulted, the platform automatically converts the collateral asset into a stablecoin to retain its value. Once the market begins to rise, the borrower can convert the collateral back to the original asset and improve their loan health.
However, the SALT platform and its native token have not been performing so well. Despite being a pioneer in the crypto-banking sector, the platform is not popular among investors. The company’s case is not helped by the fact that there are far too many crypto lending platforms in the market that offer much better services than SALT.
All things considered, I can say SALT is a mixed bag but not a fake cryptocurrency project. However, I would suggest you be careful before depositing your funds on the platform mainly due to the low ranking of the token as well as the ecosystem. It is highly recommended that you do your research before investing in SALT.