Lending over the blockchain is one of those innovative concepts which could become quite successful. SALT is one of the many companies looking to explore this business opportunity. Its goal is to let users hold onto their assets and still get their cash.
What is SALT?
SALT is a blockchain-based lending platform which lets anyone in the world leverage their blockchain assets. That collateral is then used to secure cash loans. This solution removes the need for users to sell their cryptocurrency holdings to get the money they need. It’s an interesting service that can be accessed with a convenient application process without any official credit checks taking place. The money is deposited into one’s bank account directly, and there are no prepayment fees.
Under the Hood
By focusing on borrowers’ blockchain assets rather than their credit scores, SALT is taking a very different approach to lending. Its blockchain-centric approach also makes it possible to automatically match borrowers with capital from a growing network of lenders. All of the collateral assets are kept in fully-audited wallets, which ensures funds are kept safe and provides a degree of transparency to the people extending loans as well.
SALT also aims to make it easier to liquidate, transfer, and store assets. The current business model associated with asset-based lending is incredibly inefficient and needs to be revamped. Assets on a distributed ledger are an ideal form of collateral. The team hopes to attract a lot of attention from individuals, enterprises, and other players. Moreover, there will be thorough AML and KYC screening.
When signing up for SALT, users get to choose between different “tiers” of solutions, and funds can be accessed using various fiat currencies. There’s also an option to access a line of credit, although doing so requires more “paperwork”, which is only normal. All tiers offer freedom from prepayment penalties, a loan management web portal, and educational resources. Advanced tiers use the SALT currency to lower the cost of interest payments, which is pretty interesting.
The SALT Token Explained
In theory, there are three distinct use cases for the SALT token. First of all, it can be used to lower interest rates for blockchain asset-based loans, depending on which tier one chooses. At the same time, it seems this token will also be part of how the service determines the value of one’s collateral. With this token, users gain access to membership services, as every tier requires a payment of at least one SALT per year. It’s an intriguing business model that may revolutionize the future of lending.
The Future of SALT
There is still a lot of work to be done before SALT can become a mainstream lending solution, though. According to the latest roadmap, Ethereum-based collateralized loans are the current main focus of this project. Later on, the platform will also offer native credit card support, which is pretty intriguing. By the end of the year, we will see altcoin-based collateralized loans, as well as the launch of the SALT Foundation.