There are now nearly 1400 cryptocurrencies available, and the sector is fast becoming overcrowded. The majority of these cryptocurrencies do not have a role in the marketplace, but there is one that certainly does. Its name is SALT.
What is SALT?
SALT (Secure Automated Lending Technology) is a new and disruptive technology that aims to change the traditional lending model. It can be said that one of the main aims of cryptocurrencies is to replace the existing financial model, using cryptocurrency tokens instead of traditional fiat currency.
Before this can happen, cryptocurrency has to prove its worth and establish a degree of credibility. After this comes integration, adoption and acceptance.
SALT is an excellent intermediary step in replacing fiat money with cryptocurrency. One of the main arguments against cryptocurrency is that banks are still necessary because people still need loans.
And they will need credit checks and a place where they can obtain loans from an established institution. But this field is rapidly being replaced with a decentralized marketplace using the blockchain.
SALT is a lending platform which uses the blockchain to back your loans. It gives users the ability to list assets on the blockchain as collateral for loans.
Every asset holder can then lend to other people at fixed rates. They can receive interest rates and regain their assets when the loan is paid back.
This is a near zero-risk system, because all the funds will be held in escrow on the blockchain. All of the traditional trading and loan functions can be completed without having to go to a third party to perform them.
It is automatically executed without an intermediary and cannot go wrong unless the initial code contract was not programmed correctly. This was what happened with the Ethereum DAO scandal, where errors in the code were exploited leading to the collapse and a split in the Ethereum blockchain.
SALT offers no prepayment fees and the interest rate will depend on the agreement between the two parties. No credit history is required and SALT pays attention to the cryptocurrency assets at hand.
There is no credit risk, as your counterparty cannot run away. The contract is enforced by the blockchain. Every official SALT lender must pass a SALT suitability lending test to become an accredited investor.
The lending service is useful in many ways. For example, a lender or borrower could be subject to price risk. If someone needs to sell their Bitcoin for cash and 2 months later the price of Bitcoin has doubled, then they have lost out. However, they could borrow cash using Bitcoin as collateral, and still enjoy the upside of the cryptocurrency.
How to Buy SALT
SALT runs on the Ethereum blockchain, so you will first need to download an Ethereum wallet before buying the SALT cryptocurrency. Mist and MyEtherWallet (MEW) are your best options. They have been around a long time and are highly secure.
A better option would be to download Exodus, a multi-coin wallet. Exodus stores over 30 cryptocurrencies at this time and is a highly secure desktop client. This means that your funds are safer than they would be when kept online.
Exodus is integrated with ShapeShift for the easy transfer of cryptocurrencies. It has an awesome interface and is easy to use and setup.
For ultimate security, you can purchase a hardware wallet. Both the Ledger Nano S and the Trezor support the storage of SALT. You can link your hardware wallets to mobile and desktop clients which are a little easier to use.
Remember, only buy hardware wallets from either Amazon or the official site. Otherwise you are probably purchasing a hacked wallet that will steal all of your funds.
After you have your wallet you will need to purchase some Ethereum or Bitcoin which you can then exchange for SALT. There are many options for purchasing these cryptocurrencies.
The easiest way to buy them is with a credit card on a platform such as ShapeShift of Changelly. You can then exchange your Ethereum/Bitcoin for SALT and send the SALT to your wallet address.
If you already have Ethereum/Bitcoin you can use Exodus to transfer it to SALT. It uses ShapeShift to complete the transfer.
Using these services with a credit card is very expensive, and to avoid fees you should consider using GDAX/Kraken/Poloniex. By transferring funds via bank transfer you can buy your Bitcoins or Ethereum at a far lower price.
SALT is disruptive and is one of the more well-known cryptocurrencies in the sphere of lending. However, it is certainly not the only one and there are actually many cryptocurrencies focused on changing the lending model.
EthLend is a very straightforward lending platform. It is very much similar to the existing loan system. EthLend is a peer-to-peer (P2P) platform where buyers and sellers meet up and discuss the terms of the loan.
Once the terms are agreed then the contract is written in software and executed. The platform runs on the Ethereum network and uses the famous ERC-20 tokens, which are used for the deposit on the loan.
If the borrowers repay their debts then their collateral is returned. EthLend has a partnership with BrickBlock, a platform that aims to connect real assets and cryptocurrencies. People can trade their fiat currencies, ETFs, real estate and more on BrickBlock.
EthLend functions the same as fiat peer-to-peer platforms for loans, except that the contract is automatically executed and the collateral is held in escrow by the blockchain. There are no intermediaries, tiny fees and no room for error.
EthLend is simple, user friendly and easy. If you need a loan quickly then this is a quick way to use your cryptocurrency as collateral, as it has a longer track record and a larger user base than the majority of other cryptocurrency lending platforms.
The platform itself is 100% safe and if the borrower fails to repay the funds on time, the tokens are automatically delivered to the lender’s Ethereum address.
LaToken is an asset tokenization and trading platform. It is not a peer-to-peer lending exchange like EthLend, but it is possibly a little closer to bridging the gap between financial instruments and cryptocurrency.
LaToken allows users to sell pieces of their previously illiquid assets (such as loans) on the marketplace and use these assets as collateral for loans. Art can also be tokenized. If an artist or investor needs money but does not want to sell a work of art, they could tokenize it and sell shares.
So if you have cryptocurrency and wish to purchase a house, car or loan, you no longer have to deal with a bank or fiat currency or a costly broker. You will put your house “for sale” on the platform.
And you can do the same with a loan. However, LaToken uses certified custodians and there are some charges. LaToken is in an awesome position with a great team, and could be one to look out for.
Jibrel Network is similar in many ways to LaToken, though it is not quite as established and does not have the backing or experience. It does have strong support from ICO investors and a large section of the cryptocurrency community.
You can trade currencies, equities, commodities and other financial assets on the platform, transferring them to CryDr receipts which run on ERC-20 tokens. These CryDr receipts are fully KYC and AML compliant, being based on real financial regulations.
It currently supports 6 fiat currencies and two money market instruments. Jibrel Network has its own wallet for added security. It is very much a work in progress at the present time.
WeTrust is an inclusive platform for savings and insurance with an interesting model. The first service it provides is known as ROSCA. A group of people agree to pool a fixed amount of money at all times.
Each time, the person who pays less than the agreed amount gets the pool because he is in the direst need of funds. It is an interesting way to get low income people to save money and is aimed at being an inclusive lending service for everyone. This project is still in its infancy right now though it plans to include more products and services in the future.
Of all the cryptocurrency lending platforms, the best two are probably SALT and LaToken. They are both fully functional and operate as a bridge between assets and cryptocurrency, bypassing the need for fiat currency and other intermediaries.
There is a different between tokenization and the sale of assets (LaToken) as opposed to a lending platform (SALT,EthLend), though the spheres do overlap. There is enough of a difference for both of these platforms to take off as they offer unique features.
While there are many cryptocurrency platforms, the majority are still in their infancy. LaToken is far ahead of the curve in terms of adoptability and functions but SALT is the one that most people are talking about.
If you need a loan right now then Ethlend is possibly the best way to go. But SALT aims to become a lending platform for any cryptocurrency/currency. Ethlend is based on Ethereum only.