SALT Loan Funding and Collateral Management Process
Process
How It Works
While many crypto-backed lenders rehypothecate their customer’s collateral, SALT does not.
SALT partners with Fireblocks, leveraging their enterprise-grade and CCSS validated custody platform, and multiple loan funding partners to fund loans, manage, and protect customer’s collateral.
SALT leverages their proprietary Secure Asset Funding Environment (SAFE) process that is comprised of four primary steps that are described below.
SALT partners with Fireblocks, leveraging their enterprise-grade and CCSS validated custody platform, and multiple loan funding partners to fund loans, manage, and protect customer’s collateral.
SALT leverages their proprietary Secure Asset Funding Environment (SAFE) process that is comprised of four primary steps that are described below.
1
Collateral Deposit
During the loan application process, customers deposit their required loan collateral directly to a wallet address in the Fireblocks’ environment through the SALT platform.
2
Loan Funding
A portion of the collateral is then used to fund the loan and backed by a futures contract to reclaim the collateral when the loan is paid off per the terms of the loan agreement
3
Collateral Protection
During term of the loan, the excess collateral continues to be stored and protected on the Fireblocks custody platform.
4
Collateral Repayment
Once the loan is paid off and closed the customer makes a withdrawal request through the SALT portal and the funds are transferred from Fireblocks back to their wallet.
All movement of funds are authorized via Fireblocks’ MPC technology and require multiple approvers. In addition all transfers (with the exception of to customer wallets) can only be made to carefully reviewed and whitelisted wallet addresses.
Does SALT rehypothecate?
No, SALT does not rehypothecate customers' collateral. Rehypothecation is when a financial services provider leverages a customer’s collateral to generate additional profit.
When SALT receives a customer’s collateral, it leverages the proprietary Secure Asset Funding Environment (SAFE) process to use a portion of the collateral to fund the loan and then stores the excess collateral on its custody management Fireblocks platform.
Once the loan principle is paid off, all the collateral is returned to the customer.
When SALT receives a customer’s collateral, it leverages the proprietary Secure Asset Funding Environment (SAFE) process to use a portion of the collateral to fund the loan and then stores the excess collateral on its custody management Fireblocks platform.
Once the loan principle is paid off, all the collateral is returned to the customer.
