SALT is an ERC20 token and platform for facilitating blockchain-based loans. SALT aims to bring both external borrowers and lenders onto its platform and match them, such that cryptocurrency holders can borrow against their digital assets to transact in fiat without having to liquidate. SALT allows members to set their own lending/borrowing terms and handles the matching and loan-making between lenders and borrows with respect to their stated terms.

SALT has two different value propositions attracting both sides of its platform.

The Borrower’s Value Proposition

Why is a crypto-backed loan an important service to have for the borrowers?

Holders of cryptocurrency who want to transact in fiat currency or take out a loan — a team that needs financing for a project, for example, would currently likely have to liquidate their positions to fiat in order to do so. By doing this, the investor has to pay out exchange and trade fees, as well as capital tax on any gains from appreciation of the crypto during the initial conversion to fiat. When reentering his position afterwards, the price of the cryptocurrency may differ substantially from the price at which the he sold. In the case of appreciation, not only has he missed out on appreciation of his assets but he also must buy back at an additional cost.

With SALT, holders now have access to another option. They can take out a loan for the fiat amount they need, putting up their crypto assets as collateral. An investor thus has access to fiat without losing out on potential upside, and without the need to pay taxes on any current gains, since there is no sale event from taking out a loan.

The Lender’s Value Proposition

From the borrower’s perspective, the SALT token has no real use aside from the buying membership to the platform and allowing a borrower to utilize the SALT platform. There are companies such as BlockFi providing such lending services without introducing their own token or membership system at all.

To the lenders, which SALT intends to be financial institutions looking for entrance into the crypto lending space, SALT will act as a sort of utility token to these lenders. As per their whitepaper, SALT token will be used to pay for the computation of contracts that determine the lending terms for these lenders. In essence, lenders will pay via SALT in order to utilize the loan contract handling that it provides them. Ideally lenders would be able to enter the space without having to worry about providing infrastructure to handle these types of loans since SALT’s smart oracle will handle management of collateral, arbitration, and loan servicing automatically.

That being said, SALT’s whitepaper lacks specifics on this process. In the whitepaper it is mentioned that the oracle amalgamates real-time global market price metrics. If the collateral’s value depreciates below a “dynamically” determined threshold, the oracle initiates a partial liquidation of the collateral. This occurs through “an automated trading engine, which utilizes proprietary investment logic to optimize trade execution.” Whether this performance will live up to the expectations of institutional lenders is unknown.

Current State

The founding partners of SALT are as follows:

- Shawn Owen, CEO.

- Phil Cowan, CTO.

- Ben Yablon, Chief strategy officer.

- Erik Voorhees, Board Director.

SALT was conceived around 2016, and launched loans in late 2017. SALT started handling loans in December 2017, since then have stopped accepting new loans in February 2018, citing a large backfill of loan requests totaling $1.3bn. In late March 2018 SALT announced they would be able to service loans in the UK and in New Zealand. Before their freeze on new loans, SALT was offering the opportunity to pay back loan interest at a price of roughly $25/SALT. This was likely meant to incentivize more loans to be taken out, increasing membership on the platform and also usage of the SALT token itself.

As of late, there have been concerns on communities such as Reddit about a lack of communication. The SALT team stopped participating in a regular AMA there, and pulled the official Telegram group. There is no Medium blog about SALT. A look at their engagement metrics of their Twitter channel shows a fall in tweets and followers from the end of February onward. Following this are concerns that SALT has not issued any new loans, especially given their large backlog. Competitors in the space include NEXO, a platform developed by European lender Credissimo. There is also BlockFi, which, while itself is not a token, provides the same service, though just for BitCoin and Ethereum at the moment. Currently there is no information about the SALT team on their main website.

Outlook

It’s hard to say where SALT will fall against competitors in its space, but the recent lack of communication from its team is unlikely to work in its favor.

Much of the concern for this coin comes from the current low sentiment in the community caused by a lack of communication and suggestion SALT has not approved new loans from March 2018 onward despite their purported $1.3bn backfill of loans. There is low sentiment and growth socially when compared with its competitor token NEXO. On the buyer side it is unclear how they will compete with membership-free tokens such as NEXO and services such as BlockFi. On the lender side there has also been little information about SALT’s ability to attract lenders into the space.

The value proposition the SALT team puts forth is a compelling one, but it’s up in the air whether they will be able to compete with other services.