SALT is bringing Blockchain Backed Loans to Consumers

October 7, 2017 by

SALT is secured automated lending technology;  a membership-based lending and borrowing network that allows users to leverage their blockchain assets to secure cash loans.

Before getting into the benefits that SALT provides, it is important to get some background of the project and its members to understand why this is such a big deal.

Brief history of SALT

The project SALT  was conceived /established in 2016. In early 2017, they opened capital funding round that had them raising their funds over $1 million. In order to raise funds, all the executive members have conducted personal funds for the development of the platform. In March 2017, SALT created the blockchain-backed loan agreement. They expect to launch the Blockchain-backed lending platform in 2017 Q4 and the Development Platform API and Dev Tools in 2018Q1.

Members can access the lending platforms using the SALT Token. It can also be exchanged for products and services and other rewards through the platform. Demand for lending and borrowing on the platform will drive the demand for membership. The more usage the platform has, the more valuable SALT tokens will be.

The SALT Team

SALT is made up with a team of 25; 5 of whom are the founding partners –

  1. Shawn Owen, CEO – A serial entrepreneur with experience in management and ownership of enterprise operation. Shawn became involved with blockchain technology through his advocacy of bitcoin in early 2011.
  2. Phil Cowan, CTO – 17 years of experience in application architecture development and design solutions. Prior to being CEO of ideas by nature, he spent seven years as a web application developer and graphic designer at LSDI consulting, Wombat Interactive and ASAP, Inc.
  3. Ben Yablon, Chief Strategy Officer – 15 years of legal expertise centred on emerging financial technology platforms and regulatory compliance as a partner at Atlas Law Group.
  4. Erik Voorhees, Board Director – CEO and Founder of ShapeShift, and previously founded Satoshi Dice and Coinapult.

How it works

Lenders post terms at which they are willing to lend. The members are free to choose or select the loan terms that best fit their needs so as to allow customers to exercise free will before committing.

  1. After the first step lenders commit cash funds to the loan. That implies that the member’s posts their collateral blockchain asset into the multi-signature smart contract.
  2. The collateral is entered into the multi-signature smart contract. These funds are deposited directly into the member’s bank account. These collateral assets are securely stored during the loan.
  3. The member who has taken the loan now makes the monthly payment on the loan.
  4. As soon as the loan is repaid, the member’s blockchain assets are returned.

Advantages

SALT aims to make things simple for its members.  There are no origination fees, closing costs or prepayment on the fixed rate term loans arranged through the platforms. Members may elect at any time to pay off their loans early at no additional cost to them. This is a strong contrast to terms offered by conventional lenders. SALT has opted for a simple model where fees charged to borrowers are rolled into an annual Membership to promote transparency and fairness. Its advantages are as follows-:

  • Secured automated lending technology – SALT Lending has developed protocol agnostic technology to automatically manage blockchain- backed credit agreements between borrowers and lenders. The smart contract credit agreement has several functions:
    • Secure collateral storage the blockchain assets underlying each loan are stored in a fully audited, ultra-secure multi-signature architecture throughout the life of the loan. Its key features include:
      • Scalable management of collateral
      • Mitigated counterparty risk
      • Streamlined arbitration
      • Non- custodial escrow
      • Automated loan servicing
  • Automatic collateral management – The SALT oracle smart contract amalgamates real-time global market prices metrics from multiple data channels to assess the mark-to-market valuation of the collateral depreciates below a dynamically determined threshold, a maintenance call notice is issued to the borrower. The case of maintenance call, the borrower can either add more collateral, make an extra payment reducing the loan balance, or do nothing and the SALT oracle smart contract will automatically initiate the liquidation of a portion of the collateral in order to calibrate the overcollateralization of the loan. Liquidation occurs through an automated trading engine, which utilizes proprietary investment logic to optimize trade execution based on the alive assessment of the available liquidity, order book depth and price velocity across multiple exchanges via distributed market orders for each currency pair.
  • Credit agreement terms enforcement The SALT smart credit agreement performs several loan servicing functions autonomously. Performs the following functions:
    • Monitors the origination of the loan
    • Directing cash from the lender’s bank a/c to borrower’s bank a/c
    • Tracks monthly payments from the borrower to the lender
  • Easy application – SALT provides easy application, fast approval and no credit checks. That implies that one can easily get their cash deposited directly into their bank accounts
  • Economical – It provides competitive interest rates with no prepayment fees. This helps in maintaining your position and avoid less-than-optimal tax events.
  • Liberated – Provides freedom to get your assets back whenever you want as a result it exercises the free will of the member. Thus the member can get his/her cash back whenever they want to.

SALT has a huge potential. Firstly the project is going to help cryptocurrency as an investment asset class. More people would invest in cryptocurrencies if they can borrow against it. The SALT platform is compelling not only for borrowers but for lenders as well.

With a strong team in place, SALT has a good chance to succeed because there is a genuine need for its services.

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