The stable makeup of stablecoin

stablecoin, man with laptop staring at different fiat symbols

In 2008, Satoshi Nakamoto released the Bitcoin white paper, introducing the concept of a decentralized currency to the public. From that time on, many have turned to cryptocurrency for an alternative to traditional fiat currencies that offers decentralization, transparency of exchange, and ease of use—especially when it comes to international exchanges.

However, along with the plaudits have come disadvantages, notably the volatility of digital assets relative to the US Dollar. The perceived value of a specific cryptocurrency by investors can lead to wide fluctuations in the value of Bitcoin, Ether, and other types of crypto. This, in turn, can make cryptocurrency more difficult to use as a medium of exchange or store of value.

Enter stablecoins, an inherently less volatile option being considered the best of many worlds. They provide a desirable link between the stability of fiat currency and the decentralization and efficiency of cryptocurrency.

What are stablecoins and where did they come from?

Stablecoin is a catch-all phrase for cryptocurrency that is pegged to specific reserves or other asset types. More specifically, stablecoin is divided into four groups:

  • Fiat-collateralized stablecoins: Cryptocurrency assets secured against real-world currencies, such as USD Coin (USDC) and Gemini Dollar (GUSD).
  • Commodity-collateralized stablecoins: Cryptocurrency assets fixed against commodities, such as oil, gold, and silver. One example is Pax Gold (PAXG), which is one of the collateral types available on SALT’s platform.
  • Crypto-collateralized stablecoins: Algorithmic stablecoins that mint dollar equivalents based on the value of the crypto provided to backstop each unit.
  • Non-collateralized stablecoins: Stablecoins that automatically adjust its aggregate supply to maintain a certain price or pegged asset. 

The first stablecoins, BitUSD, and NuBits, came online in 2014 and were collateralized through various other cryptocurrencies. Also released in 2014 was RealCoin (now Tether), the first crypto to be backed by so-called “real” assets. Active dollar-based stablecoins today include Paxos Standard, TrueUSD, USD Coin, Tether USD, and Gemini Dollar.

How to use stablecoin for a crypto-backed loan

Though it might not be a strong addition to an investment portfolio, stablecoins are useful in many ways. For example, at SALT Lending, as a provider of crypto-backed loans, we accept stablecoins for:

  • Making direct payments on crypto-backed loans. Reimbursement via stablecoin is nearly instant, with minimal time lag between payment and acceptance.
  • Maintaining a more stable loan to value ratio on a loan, by boosting stablecoin holdings as part of overall collateral.
  • Depositing stablecoin at any time to protect the cryptocurrency collateral value during a market downturn. Stablecoin payments can be made outside of normal banking hours or holidays, unlike cash or fiat payments, meaning borrowers can manage loans without the need for a bank.

SALT also offers loan payouts via stablecoin or fiat currency. The advantage of a stablecoin payout is that only a stablecoin address is required, no bank account is needed.

The potential of stablecoins

Cryptocurrency enthusiasts see value in stablecoins given their decentralized properties, ability to facilitate better payment rails for global commerce, accessibility in unbanked jurisdictions, and programmability to streamline business operations.

Meanwhile, more traditional institutions are researching stablecoins for their potential in cross-border lending and overseas transactions without conversion into fiat, or sovereign currency. The Bank of Canada mentioned the use of stablecoin in its 2020 vision, focusing on it as a part of emerging payment technologies. Meanwhile, The U.S. Office of the Comptroller of the Currency released guidance indicating that national banks are free to hold reserve currencies for stablecoin.

While much of the world continues to rely on fiat currency for financial operations, digital currencies have been quickly disrupting this archaic financial infrastructure. Of those currencies, stablecoins could bridge the divide between cryptocurrency volatility, decentralized ownership, and providing banking solutions in otherwise untouched jurisdictions.

For more information about cryptocurrency loans and stablecoins, contact SALT Lending.

Preserving Your Wealth with SALT Stabilization

man staring at two paths: one leads to liquidation and one leads to stabilization

Ever wonder why we developed SALT Stabilization? Because we wanted our lending product to better align with our mission: to build products that increase access to financial opportunities and give people more control over their ability to generate long-term wealth.

Here’s the back story. 

It all stemmed from the fact that Justin English — SALT’s chief executive officer– was a borrower with a SALT loan long before he became SALT’s CEO. Justin loved our loan product because it offered a way for people like him to get value out of his crypto assets without having to sell them. The only problem? Liquidation. After a single market crash Justin lost nearly 100% of his crypto portfolio. Having a deep understanding of the stress and pain that comes with constantly watching the market, Justin was well equipped and knowledgable when he stepped into the CEO role. He was able to take your feedback, combine it with his own experience and use it to improve our lending product.

While our existing loan product was offering ways for our customers to escape some of the constraints of traditional finance, it wasn’t meeting the second part of our mission (helping people like you build long-term wealth) to the degree we wanted it to. While we know liquidation is a necessary part of crypto-backed lending, we also knew there had to be a better way to manage our clients’ loans during market crashes. We considered all the stress that comes with market volatility, and while we had (and still have) many tools in place to help you track the health of your loan (our Loan-to-Value Ratio monitor, real-time call, text and email notifications, etc.), we also realize that no matter how diligent you are about managing your loan, sometimes the market crashes faster than any of us can handle. Being a diligent borrower himself, Justin understood this pain point on a personal level and wanted to build a better product that could address and help alleviate some of the nail-biting stress that stems from constantly watching the market.

Quote: "Nothing would give me greater peace of mind than going on vacation and waking up the morning after a market crash to know my crypto wealth has been preserved." -- Justin English, SALT CEO

Introducing SALT Stabilization

Enter SALT Stabilization, the product designed to preserve wealth and reduce stress. 

Instead of selling a portion of your crypto assets and using them to pay down your loan to restore it to a 70% LTV, with SALT Stabilization we convert your portfolio into stablecoin (USDC) once your loan-to-value ratio (LTV) hits our stabilization threshold of 90.91%. By doing so, we can offer you more control over how and when you want to restore the health of your loan. Once you cure your LTV back to a healthy level (below 83.33%), you are eligible to convert your portfolio back to the collateral mix of your choice when you’re ready.  

Depending on how you time your conversion, you may even end up with more crypto assets than you had before you were stabilized. With SALT Stabilization, you can preserve the value of your crypto portfolio, and if you time it right, you can even grow it.

SALT Stabilization in Action

Since releasing SALT Stabilization in late 2020, we’ve had some time to see the product in action and learn more about how it preserves wealth for our clients during market volatility. 

One of our customers experienced stabilization twice within a single week and converted the assets back both times. This particular customer converted his assets back fairly immediately following the first stabilization. However, following the second stabilization, he decided to wait, watch the market, and convert his assets back 80 days later. By offering him the option to leave his portfolio in stablecoin until he was ready to convert his assets back on his own terms, SALT Stabilization allowed the customer to preserve 87% of his portfolio. Had this same customer been liquidated twice under our previous model (the current model of other crypto lenders) he would only have 16% of his portfolio remaining following two liquidation events. This is a prime example of SALT Stabilization doing exactly what it was designed to do.

Old Method: Liquidation

Liquidation Method

New Method: SALT Stabilization

SALT Stabilization

By having your portfolio converted to USDC during a market crash, you’re able to preserve the value of your portfolio to a degree that traditional liquidation would not allow. 

Stabilization vs Liquidation

If you’re on the fence about choosing a crypto-backed lender ask yourself: 

“When the market crashes would I rather lose 84% of my portfolio or 13%? 

We’re pretty sure we know the answer. 

How to use a crypto-backed loan

how to use a crypto-backed loan, man writing on note pad 10 ways to use a crypto loan

If you need access to a loan, you’re probably considering the lineup of traditional options like credit cards, personal loans, business loans, and home equity options. They all base your ability to borrow off of your income, credit, and possibly your assets. But one option that isn’t as widely-talked about is a crypto-backed loan. It’s a new way to borrow that doesn’t factor in your credit and income as no personal guarantee is required. Instead, it’s a loan simply secured by your crypto assets. So how can you use a crypto-backed loan from lenders like SALT?

10 ways to use a crypto-backed loan

1. Pay off credit card debt

Credit cards have a place in our economy and can help you rack up rewards, but with interest rates up to 29%, they aren’t typically the best option for carrying balances. Crypto-backed loans, on the other hand, give borrowers a flexible way to access lump sums of cash with interest rates starting as low as 5.95%. 

If you have crypto, you can get a crypto-backed loan and use the proceeds to pay off high-interest credit card balances, consolidating them into one payment and potentially lowering your cumulative interest rate.

pay off credit card debt, image of man holding credit card

2. Make a large purchase

Whether you’ve been planning to make a purchase for a while, or an emergency popped up and took you by surprise, the proceeds of a crypto-backed loan can help you cover it. For example, say you want to take a family vacation to Hawaii. Instead of putting the flight and all the trip expenses on a credit card, you can take out a crypto-backed loan and then pay for everything in cash. This can help you avoid higher interest rates and any negative impact on your credit score.

3. Home renovations and improvement projects

From a burst water pipe to an unexpected HVAC repair, homeownership can be expensive. While it’s advised to have a rainy-day fund just for these occasions, even the best savers may find the final bill just out of reach. You may also feel reluctant to drain your emergency savings account to put your house back in order. A crypto-backed loan can quickly get you the cash you need.

man painting home, complete home renovations and improvement projects

4. Paying off medical debt

If you’re still opening bills every month thanks to that one time you broke your arm ten years ago, you are not alone. About 32% of American workers have medical debt and more than half have defaulted on it. Medical debt can be crippling to an otherwise healthy budget, and with payments lower than with other types of financing, it can take years and years to pay off. 

A crypto-backed loan may be just what you need to get that hospital or clinic to stop calling, and it’s often much cheaper than putting all of that debt on credit cards. Further, if your personal credit is maxed out, a crypto-backed loan can open up a new avenue of borrowing for you. 

pay off medical debt and bills, image of hospital and money

5. Planning a wedding

Even if you don’t want to spend too much on your big day, the average wedding in the US costs just shy of $40,000. From the dress and the venue to the flowers and catering, many expenses add up. Temporarily trading your crypto for cash can help you cover the big day without digging into savings or driving up your credit utilization. Cash payments to vendors can also sometimes get you a discount on services, giving you yet another reason to consider grabbing that crypto-backed loan before saying, “I do.”

plan and pay for a wedding, image fo couple and a wedding cake

6. Buying a house or real estate

Have you considered buying a property outright without the hassle or extra fees of a mortgage? A crypto-backed loan may be just the ticket to closing on that house deal. You’ll also be at an advantage as a cash buyer in an increasingly tight housing market; the seller may be more than happy to give you the deal since there are no additional lender hoops for either party to jump through. Cash obtained from a SALT loan is also free of those “extra” charges, such as loan origination fees.

Buy a home or real estate, new home

7. Starting a business

Even the simplest online businesses have startup costs. A crypto-backed loan can help pay for the costs like forming an LLC, building a website, and getting your first product manufactured. Don’t let another year pass with the excuse that you just don’t have the funds. If you have crypto assets, this can be the year you get your dream business going.

8. Upgrading mining equipment for mining operations or individual miners

Crypto miners have to evolve to survive, and that means investing in the latest, most powerful equipment. Being that you’re already involved in the crypto sphere, crypto-backed loans are a natural choice that can help you stay competitive and get every coin you can. Plus, it’s an investment that can help you not only pay off your loan and get your crypto back but also earn more.

upgrade mining equipment for bitcoin and crypto mining

9. Fund ongoing operational business costs

While new businesses benefit from getting a funding jump-start, existing companies can often use a little extra cash flow too. Whether you want to hire new employees, invest in marketing, expand your product offerings, or something else, business owners of all types are turning to crypto-backed loans to diversify their borrowing and take advantage of low rates through short-term loans.

fund or pay for operational costs

10. Reinvest or trade crypto

Serious crypto investors often need fiat to acquire more crypto. A crypto-backed loan that gives them access to cash can help them do so. With the crypto markets showing promise, and the rates on SALT loans very low, it’s easy to see how smart investors can make the numbers work in their favor to expand their crypto enterprises.

invest in crypto

SALT crypto-backed loans: Flexible funds with no personal guarantee

Whether you only need a few thousand dollars or a large lump sum, SALT loans can give you access to $5,000 or more in USD or Stablecoin. Secure your loan easily, with a single crypto asset, or through a combination of SALT-approved currencies. You’ll always know how your assets are doing, as SALT’s secure system and unparalleled customer support ensure that you can check in on your assets at any time. There’s no credit check needed, either. Once you deposit your collateral assets onto the SALT platform, you’ll be well on your way to getting the cash you need for whatever move you want to make.

Claim Form Now Available to Eligible Purchasers of the SALT Token

A message from SALT: the claim form distributed to eligible purchasers of the SALT Token

As of today, the claim form associated with the requirements of our SEC settlement is now available for you to view on the SEC website. The E-Claim Form Portal will be available tomorrow before 11:59pm EST for eligible purchasers of the SALT Token (those who purchased SALT Tokens directly from us) who wish to submit a claim. Please note the form must be filed electronically via the E-Claim Form Portal, as claims submitted by facsimile, email or other means of electronic transmission (without the express permission of the Claims Agent) will be rejected.

To access the form, visit this link: http://www.saltoffer.com/. Please note that as an eligible purchaser, you will need the email address you used to purchase SALT Tokens.

Have questions? 

Check out our FAQ. If you do not find the answer you need or have questions about how to complete the form, please contact [email protected]

Introducing SALT Connected Accounts – UPDATED (August 25, 2021)

UPDATE: Due to the fact that Zabo has joined Coinbase, they are shutting down the API for connected accounts, meaning we will no longer be able to offer this feature.  

Want to see all of your crypto assets in one place?

Now you can with SALT Connected  Accounts. 

This new feature allows you to add your external accounts and wallet addresses to track all of your crypto assets right from the SALT app.

With a holistic view of your assets, you can manage your loan more intelligently than ever.


iphone rendering

Get Started with SALT Connected Accounts

  • Download the SALT App

    Available today on the Google Play and App Store

  • Connect Your Accounts

    Connect up to 100 external accounts from the SALT app

  • Get the Big Picture

    Track all of your crypto assets in one place

Disclaimer: Link your cryptocurrency account via read-only API access or blockchain address tracking. Account data is for informational purposes only and will not constitute loan collateral.

SALT announces the SALT Card

Waitlist now open for the first crypto-backed credit card designed to help you HODL.

Today we announced our concept for the SALT Card, the first crypto credit card that lets you use your crypto to buy anything — from large purchases like vacations to everyday purchases like coffee and groceries– without selling or spending any of your crypto. Unlike other cards on the market that encourage you to spend your crypto, the SALT Card is designed to help you HODL and stack sats by earning bitcoin rewards on every purchase. No credit check required.

Already sold on the concept? Join our waitlist to stay in the know or keep reading to learn more.

Credit card - whether its for video
SALT Credit Card fanning out gif

How will the SALT Card work? 

With the SALT Card, your crypto is your credit. This means we won’t ask for your credit score or do a credit check because your digital assets (not your credit score) will secure your line of credit and determine your credit limit. 

We designed it this way because we know you want to get the most out of your crypto assets without having to sell them. 

How is it different from a crypto-backed loan?

While the SALT Card is secured by your crypto assets, it’s different from a crypto-backed loan in that you can choose to borrow only what you need, and you only pay interest on an existing balance. Like a traditional credit card, if you pay the balance off each month, you won’t owe any interest. Plus, by having a physical SALT Card, you will be able to use it in the same places and for the same purposes as the other credit cards in your wallet.  

What makes the SALT Card stand out? 

Here are just a few of the existing benefits. We’re still in the early stages of developing the card and are currently in search of a card partner.

Benefits of the SALT Credit Card

Once we have a partner on board, we will be able to finalize the card rewards and any additional benefits. In the meantime, we’d love to hear your input on what you value most in a crypto credit card. 

We’re excited to be launching a new product and hope you’ll join our waitlist to receive the latest updates in the development of the SALT Card.

If you are connected to a major credit card partner and are interested in working together, please contact [email protected] We’d love to hear from you and explore opportunities.

Disclaimer: By joining the waitlist you agree to receive marketing communications from SALT. The waitlist does not guarantee that you will receive a SALT Card. SALT Card will be subject to eligibility requirements, including geographic and suitability limitations. Fees and terms are not final and are subject to change at any time in SALT’s sole discretion.

SALT partners with Percent, gives investors exposure to private credit assets linked to cryptocurrency

SALT Now Partnering with Percent

We fielded demand from users to invest in SALT loans for years and are now excited to partner with Percent (formerly Cadence), a leading and innovative financial technology platform providing access and efficiency for investors and originators in the private credit industry.

We are proud to say that we have already successfully funded seven deals with Precent with an average deal size of $1.8MM. For more info, see our deals page. 

Update regarding our supported collateral types

Effective May 25, 2021, we will no longer accept Dash and Doge as collateral for new crypto-backed loans, nor will we support future deposits of these collateral types, but for those who already have Doge and Dash on our platform, we will continue to support and monitor your collateral. Withdrawals will continue to be available as usual for anyone who currently has Doge or Dash on our platform.

We are constantly evaluating our current collateral types and considering new ones based on market conditions and other parameters. Given Doge and Dash do not meet our current collateral requirements, it is necessary for us to remove them from the platform at this time. While we are sad to say goodbye, it doesn’t mean it’s goodbye forever. And who knows? Between Elon’s tweets and Coinbase’s decision to list Doge, maybe one of these collateral types will be back before you know it. Only time (and market conditions) will tell.

In the meantime, we continue to support many beloved cryptocurrencies as collateral for crypto-backed loans including BTC, ETH, LTC, BCH, PAX, PAXG, USDC, TUSD and SALT.

Want to be kept in the loop regarding announcements and products releases? Sign up for our newsletter.

SALT Files Form 10, Focuses on Scalability and Growth

The filing will provide transparency into SALT’s financials, increase the company’s access to funding opportunities, and enable SALT’s expansion into the wealth management space 

Clip board with form to file representing SALT's Form 10 filing with the SEC to register the SALT Token and become a publicly reporting company.
SALT files Form 10, focuses on scalability and growth.

Today SALT Blockchain Inc., a company that provides crypto-backed loans and is expanding its product offerings to include wealth management services, announced it has filed a Form 10 registration statement with the U.S. Securities and Exchange Commission (“SEC”) in connection to its registration of the SALT Token. With this filing of the Form 10 with the SEC, SALT will officially become a publicly reporting company effective 60 days from today. 

The filing brings a new level of transparency to the crypto industry as SALT’s new reporting standards will soon match those of publicly traded companies like Apple and Tesla. “This is completely new territory for us and as we’ve gone through this process, we’ve developed a renewed focus on financial stability and profitability as we seek to grow and scale,” said CEO of SALT Justin English. “It’s a significant and positive step for the business, as our ability to meet regulatory demands and share audited financials with traditional institutions will open up new funding opportunities and will enable us to better pursue our mission and vision.” 

SALT’s updated mission– to build products that increase access to financial opportunities and give people more control over their ability to generate long-term wealth– has been a driving force behind the company’s move into the wealth management space. As part of this new business focus, SALT recently acquired trade execution technology from P3K LLC that will enable the company to offer algorithmic trading strategies to institutional and accredited investors through managed accounts.  

In addition to developing its new asset management line of products, SALT has continued to enhance its lending offering. In Q4 2020, the company launched SALT Stabilization — a product that serves SALT’s lending customers and preserves the value of their crypto portfolios in a market downturn. When it comes to lending, SALT is hyper-focused on streamlining its offerings to create a frictionless lending product that still meets compliance standards. “We recognize there’s a spectrum between DeFi and CeFi and that there are tradeoffs to each. At SALT we will soon offer products that will impart the frictionless aspect of DeFi with the added components of compliance and customer service that come with CeFi,” said English. 

SALT had a profitable fourth quarter in 2020 and is well-positioned to grow and scale as it pursues its mission to expand into the wealth management industry. With the added element of financial regulation, traditional funding institutions can feel confident in knowing that SALT is held to the highest level of reporting standards while SALT Token holders can feel confident in knowing that SALT will continue to innovate. “This has been a long process and I’m really excited about where we’ve ended up,” said English. “I’m confident we have the right team in place, the right technology, and the right goals in mind to execute on our vision. We’re in the midst of an upward trajectory and it’s clear to me that SALT has a bright future ahead.”  

For capital providers interested in investing in SALT, contact: [email protected]

For those who want to stay up to date on company announcements and product releases subscribe to SALT’s newsletter here.

A Message from SALT on our Form 10 registration statement filing

In September 2020, SALT reached a settlement with the U.S. Securities and Exchange Commission (SEC) related to the offer and sale of SALT Tokens in our “membership token sale” or “initial coin offering” (“ICO”), in which we offered and sold digital tokens (“SALT Tokens”) starting in 2017 through 2019. As part of the settlement, we are preparing to file a Form 10 to register our SALT Tokens under Section 12(g) of the Securities Exchange Act of 1934.

We have been working on the registration process and the SEC has granted us a 75-day extension on our filing deadline — an option that was included in the original SEC order. As a result of this extension, the Claim Form for purchasers of the SALT Token (applicable to those who purchased SALT Tokens directly from the SALT before and including December 31, 2019) will be available 60 days after the date of the filing of the 1934 Act Registration (or on the date seven (7) days after the 1934 Act Registration becomes effective, whichever date is sooner). For additional information about the claims procedure see the original SEC order.

As we work to complete the registration process, we continue to remain focused on providing new avenues for our customers to grow and preserve wealth. Not only have we made significant improvements to our lending product, but we have formed partnerships that will enable us to expand the business beyond lending. We’re excited about SALT’s future and will continue to share updates and milestones via our website.

 

The first card that lets you use
your crypto for everyday purchases,
without selling any of it.

The first card that lets you use
your crypto for everyday purchases,
without selling any of it.

Three SALT credit cards floating

The first card powered by your crypto,
not your credit score.

The first card powered by your crypto,
not your credit score.

Three SALT credit cards floating