Introducing SALT Connected Accounts

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.


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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.

How to Protect Your Anonymity Against Crypto Dusting Attacks

Understanding the nature of dusting attacks and airdropping can help you determine the best way to protect yourself and your crypto holdings from hackers and scammers.

Since Bitcoin’s debut to the public more than a decade ago, supporters have praised the benefits of cryptocurrency transactions including decentralization, transparency and anonymity. While these benefits certainly have their advantages, crypto’s nature also opens you up to a level of risk that has been realized through activities like dusting attacks and airdrops that often go completely unnoticed if crypto holders don’t know what to look for. Fortunately there are steps you can take to protect yourself from malicious entities interested in deanonymizing you. Understanding the nature of dusting attacks and airdropping can help you determine the best way to protect yourself and your crypto holdings from hackers and scammers.

The blockchain: Not as anonymous as you might think

Many people mistakenly think bitcoin is private. It’s anonymous, yes, but not private. A transaction is made up of input(s) and output(s). When you spend, you are creating a transaction using your address as an input. When you receive, your address is given an amount of bitcoin, which becomes the output. All of this transaction information (including the addresses involved, amounts and times of the transactions) are recorded on the blockchain. As that ledger is 100% transparent and public, so are your transactions. Any uninvolved party (people who have not transacted with you directly) examining the blockchain can see the cryptocurrency being received or spent — they just won’t know it’s you spending or receiving it because the owners of the addresses are not revealed. If the person you’re transacting with knows who you are however, they may be able to associate your blockchain wallet (and future transactions) with you, as anonymity only applies when referring to non-involved parties. And even still, a non-involved party may not know who you are from the beginning, but by watching blockchain activity, they may be able to figure it out if your wallet is maliciously “dusted” and use this information to deanonymize you in the future.

Dusting: Revealing your identity, one satoshi at a time

When you use bitcoin to pay for something, one or more addresses (UTXOs) are selected that most closely match the amount due and you receive an output UTXO with your change. For example, if you were paying for something equal to $400 and you had three UTXOs in your wallet equal to $5,000, $5, and $399, you could use the UTXOs equal to $399 and $5 and would receive a UTXO back worth $4. All of this information is recorded on the public ledger.

With dusting, a hacker or scammer sends very small amounts of a cryptocurrency (dust) to a large number of addresses. If you receive dust, you will have a UTXO in your wallet with a very small value. As you spend from your wallet, the attacker watches to see when the dust UTXO is picked up. When it is, they take note of all the other UTXOs that go along with it as well as what addresses they go to. When these entities study transactional patterns long enough, they can eventually identify all the addresses linked to your wallet, which means they can figure out how much crypto you have. If your account is of interest (you have large sums), they can work on figuring out it belongs to you, which can make you a target for anything from scams and phishing campaigns to cyber-extortion threats.

One reason dusting is so insidious is that the amounts of crypto sent to accounts are so very small; they are smaller than the minimum transaction fee required to use cryptocurrency. Most times, the dusting amounts are calculated in units known as satoshis; one satoshi equaling 0.00000001 bitcoin. Given the minuscule size of dust, the chances are pretty good that many people won’t notice them as they casually scan their cryptocurrency total.

Airdropping: Free tokens, potential scams

Airdropping is similar to dusting in that it adds small amounts of crypto to your wallet. But airdropping’s purpose is far less ominous. Companies that airdrop want to use you to spread the word about their great new cryptocurrency. As such, they will send free coins or tokens to your address (found on the public blockchain). Sometimes they send them free and other times they ask for something in return (like a tweet about the company and its currency). You might also actively encourage airdrops to your wallet in hopes that the new cryptocurrency will ultimately have a large payout. There are hundreds of airdrop lists and websites, all eager for your interest.

While the purpose of airdrops is often benign, problems come up when hackers and scammers reach out for more than your public wallet address. If you aren’t careful, you could be at risk from the following:

  • Private key theft. Private key theft takes place when an airdrop entity asks for the private key to your wallet. You should never give out your private key. While more savvy crypto users can spot such a scam, those new to cryptocurrency trading could fall victim to it.
  • Trolling/information collecting. Sometimes nefarious airdrop websites are used, not to promote currencies, but to gather data — such as email, wallet addresses or even social media information — that can be sold to third parties or used for future phishing attempts.

Protect your crypto from malicious dusting and airdrop attacks

Because cryptocurrency transaction information is public knowledge, it’s important to protect yourself, your holdings and your anonymity. In addition to ensuring anti-spam and anti-viral protection for your wallet, consider the following steps.

If you think you’ve been dusted, don’t move the dust. Look for wallet apps that allow you to “mark” small, unknown deposits in your wallet to prevent them from being used for other transactions.

Monitor your balance — 100% of the time. If wayward satoshis suddenly show up in your cryptowallet, you might have been dusted. It’s a good idea to find a wallet app with a push notification, which tells you when you receive new funds.

Don’t give out private information — ever. If a website — or other airdrop entity — wants more than your wallet address in exchange for tokens or coins, it’s a red flag. Be as wary of handing out your cryptocurrency information as you would be of providing fiat bank account log-in data.

Keep your anonymity in place

None of the above is meant to suggest that cryptocurrency trading or usage is dangerous. It is, however, a reminder that while transactions can be anonymous (when actually conducting a transaction you may potentially be revealing information about who you are to complete it, which can then be associated with your wallets), they aren’t private. Unfortunately, scammers and hackers are taking advantage of the very public blockchain technology to determine the identities of those behind cryptocurrency transactions.

The good news is that knowledge is power. You can protect yourself from malicious entities and preserve your anonymity by being aware of attacks like dusting and taking preventative action. Doing so will better protect you and your holdings while helping to ensure you don’t become victim to phishing or cyberextortion threats.

Game Theory and Bitcoin: the Miners’ Perspective

Competition drives markets. In traditional financial markets, however, competition is limited to the production of goods and the buying and selling process. With Bitcoin, competition plays a far-deeper role. The minting of new bitcoin, as well as the processing and verification of transactions, are all made more efficient, accurate, and secure, thanks to competition. It’s no surprise, then, that game theory plays a pivotal role in the inner workings of the Bitcoin ecosystem.

A brief explanation of game theory

Game theory models the strategic interaction between players in a scenario with set rules and outcomes where the players are rational and looking to maximize their payoffs. In effect, it’s a more detailed, nuanced way of looking at how incentives affect how things get done.

For example, if your job is to shovel 100 pounds of stone into a hole and you’re all alone and have all the time you want, there’s no game theory involved. On the other hand, if someone else is given the same task and you’re each working with the same pile of stones, the dynamics of the situation change.

They change further if only the person who shovels the most gets paid. And, naturally, if you get paid according to how much you shovel, the outcome of your actions would change in yet another way. Each of these situations will be impacted by game theory and its many models.

Although Bitcoin seeks to espouse concepts like “fairness,” “transparency,” and others that are often incongruent with competition, game theory still plays a primary role in the Bitcoin universe.

How does game theory apply to Bitcoin mining?

Bitcoin mining involves solving math problems that are used to create new bitcoin and verify transactions. To continue with the stone shoveling example, if you have as long as you want to move the pile of stones, you may choose to take your time. Your shovel may move slower than if someone else were involved in the task because then the speed at which you shovel would determine whether you get paid more, less, or at all.

The fact that multiple miners compete to verify transactions and generate coins gives Bitcoin an inherent efficiency: The job gets done faster. To dig a little deeper, three types of game theory driving this process include zero-sum theory, congestion theory, and the Nash equilibrium. Let’s take a closer look at how these concepts work.

Bitcoin mining and zero-sum theory

Zero-sum theory dictates that the “winner” gets the spoils and everyone else walks away with nothing. In the mining of bitcoin, the first person to solve a problem gets the value associated with completing the task. Everyone else gets nothing. If you could take a snapshot of the nanosecond a particular hash is found, you would see one user getting rewarded for their work and the others getting nothing.

However, because the Bitcoin system requires so many problems to be solved all the time, in reality, many miners can earn a relatively steady income. The strategies they use are governed by two other game theory concepts — the congestion theory and the Nash equilibrium.

Bitcoin mining and congestion theory

Congestion theory stipulates that the amount each player gets depends on the resources they choose and how many other players choose the same resources.

For example, imagine there are two stations with trains heading to the same destination, and each train can hold only 10 people. One train station is five miles closer to the destination. If there are 100 people, and everyone goes to the closer station, one train will have to go back and forth 10 times. On the other hand, if some of the passengers go to the closest station and others go to the station farther away, there will be less congestion, and everyone will arrive at the destination sooner.

In Bitcoin mining, many of the decisions of the miners depend on congestion theory. If there was only one miner, all the spoils would go to her or him. On the other hand, Bitcoin is open to all, so each miner has to decide whether they will get in the game — and add to the congestion — knowing that more people are bound to get in the game, decreasing their chance of winning.

Once a miner decides to get involved, they then have other decisions to make regarding the equipment they choose. Faster equipment provides an advantage, similar to getting on the closer train. However, the quicker the equipment, the more electricity it takes to run, which increases the cost of mining.

If a miner’s earnings won’t sufficiently offset the cost of electricity, they may choose not to get involved. They may also choose to forego setting up a mining system and join a mining pool instead, where the electricity costs are absorbed by multiple participants. Congestion theory dictates which “train” each miner takes, as well as when and how they get involved.

In addition, the way the decisions of each miner affects the others is governed largely by another game theory concept: the Nash Equilibrium.

Bitcoin mining and the Nash Equilibrium

In the Nash equilibrium, named after mathematician John Nash from the movie A Beautiful Mind, each “player” recognizes that while they have similar goals, not everyone can get exactly what they want. Therefore, some will choose to settle for a less-desirable outcome, satisfied with the fact that they are at least getting something. All players agree to proceed, happy to share the spoils.

For example, continuing with the stone shoveling scenario, you may be stronger and faster than the other shoveler. Both of you agree to shovel for the same amount of time, but you get 70% of the money while the other shoveler only gets 30%. The other person could protest, but realizing that something is better than nothing, they agree to the terms. At this point, an equilibrium is established. At the end of the day, you both earn money and walk away satisfied.

The worldwide community of miners also follows Nash equilibrium principles. Some miners have more money than others and can afford to purchase the latest mining computers, capable of solving specific hashes faster than older models. Other miners may not have as much money, but they live in areas where electricity is less expensive. They can, therefore, spend less than wealthier miners who live in areas where electricity is more costly. Some live in places where it will never be profitable to mine, so they join a mining pool instead.

Each miner recognizes that their limitations dictate how much they will get. At the same time, all agree to participate, satisfied with their portion at the end of the day — even if it’s just a small fraction of a bitcoin.

How miners are incentivized

Zero-sum theory, congestion theory, and the Nash equilibrium only work because of the ways miners are incentivized and dissuaded from cheating the system. Before mining rewards are approved, the technical infrastructure enforces the “trustless” nature of the Bitcoin network. If miners do not adhere to protocol rules, their block submission will be rejected by other nodes in the blockchain. All network nodes including other miners verify the ledger entries packaged into a new block. If entries are considered invalid, or the block hash doesn’t meet network requirements, the miner’s result will be rejected and the 6.25 BTC will be awarded to another miner.

While the block rewards are enticing at current BTC valuations, there are other financial implications that compel miners to either continue or suspend network operations. No miner will win the worldwide competition each time a new block is added (~every 10 minutes), so they must weigh the probability of profitable successes. There are other factors to consider, too. For example, some miners may decide to bow out when electricity becomes too expensive. Others however, may have a longer time horizon and decide to accept the risk of energy expenditure, calculating that miner attrition will increase their chances of winning new block rewards. In other words, fewer miners in the network means more chances for the remaining miners to profit. For those adopting this viewpoint, the potential of solving enough blocks to maintain business profitability outweighs the risk of any short-term loss related to high energy costs.

How bitcoin is distributed

Every block consists of many small transactions. When a block is mined, the winning miner is awarded 6.25 bitcoin plus all transaction fees for each transaction they were able to package within the block. The more blocks you are able to solve, the higher your reward. In other words, you get a bigger piece of the pie. Hunger for more slices of pie incentivizes miners to purchase more powerful equipment or move to areas with lower electricity costs.

Game theory and the surety of the Bitcoin network

The Nash equilibrium helps motivate miners to do more than generate new bitcoin. Each miner has no choice but to play a role in making sure the network functions as it should. This is a part of the “pile of stones” each miner agrees to shovel.

In a Nash equilibrium, although the individual participants would like to either get more rewards or a different type of reward, they agree to settle with getting something of value rather than nothing. The Bitcoin network compels miners to play by an agreed set of rules to add transactions to the distributed ledger, or their work will be summarily rejected. At the same time miners add security to the network by expending expensive energy that chains each new block to the preceding block via a well established mathematical algorithm.

Each miner is, therefore, a generator of new bitcoin liquidity as well as an auditor, checking the details of network transactions. Even though each problem solved involves a zero-sum game and congestion theory dictates how each miner approaches the task, everyone works in a happy Nash equilibrium.

In the end, game theory is an underestimated, yet essential, element of the Bitcoin network. As each miner plays their role, historical transactions are kept secure and new transactions unanimously approved, which helps maintain Bitcoin’s position as the number one digital currency in the worldC

 

How to Grow Your Business Capital Through Cryptocurrency

By Annabelle Pollack

Disclaimer: Buying cryptocurrency is risky. This article is for informational and educational purposes only and does not constitute investment or financial advice.

Cryptocurrency is reshaping the finance and business worlds. Not only has it challenged conventional thinking, but it has provided new avenues for entrepreneurs and business owners to start and grow their businesses in these uncertain times. Many of them have turned to crypto as a way to raise initial capital or to fund ongoing operational costs. If you’re seeking creative ways to grow your business capital through cryptocurrency, there are a few ways to go about it — the most important thing when it comes to getting involved with crypto is doing your research to identify the best avenue for achieving your business goals.

Choose the right cryptocurrency for your business

When it comes to determining which cryptocurrency is the ideal fit for your business, you have several options from which to choose. At the moment, there are already more than 1,000 unique cryptocurrencies in which you can transact. But just as there are blue-chip stocks, a guide to cryptocurrencies by FXCM details how some digital currencies are considered the “gold standard” of the industry. At the top is Bitcoin, which is regarded as the first incarnation of cryptocurrency and is projected to have a market capitalization of $1 trillion in the near future. Next is Ethereum, whose $83 billion market capitalization is poised to expand in the coming years due to its growth potential in the online sphere. Then, there is Litecoin, and its surging market cap of over $18 billion. Bitcoin, Ethereum, and Litecoin are seen as the strongest investments, with Yahoo! Finance noting how a high market cap is indicative of high investor activity. All three are extremely liquid, too, which means they can be easily sold at the market price. Each cryptocurrency is different and may boast specific features that others do not. Some factors to consider as you’re choosing a cryptoasset for your business are security, privacy, transaction speed, block times, market cap, liquidity, and the blockchain upon which the cryptocurrency is built. Once you identify which factors are most important to you, you can narrow down your options and choose the crypto(s) best suited for your business.

Buy and Trade Crypto

Once you’ve done your research, identified your cryptocurrency of choice, and learned the ins and outs of the industry, you can evaluate whether you’re confident enough in your knowledge to move forward with buying and trading digital currencies. That being said, it’s essential to prioritize safety and security regardless of whether you’re trading frequently or buying for the long term. A good way to do that is to find a reputable online cryptocurrency trading platform that can help you buy and trade crypto, as well as help protect your investments. Some trading platforms even offer crypto CFDs (not available in the United States) that don’t require a special wallet or exchange account, but will ask you to speculate on the direction of their price movements instead. You can also invest in several coins at the same time, as doing so may help you mitigate the risk that comes with putting all your eggs in one basket. This way, you’re more likely to see your business capital increase.

Get a crypto-backed loan

In an instance where you need cash but are unwilling to part with your crypto entirely, consider taking out a crypto-backed business loan. As the name suggests, this type of loan is secured by cryptocurrency, offering a way for you to get cash or stablecoin without having to sell your cryptoassets. The amount of cryptoassets you’ll be required to put up as collateral is contingent on a few factors including your loan amount, loan duration, and Loan-to-Value ratio (LTV). If this option appeals to you, a SALT loan might be just what you’re looking for. SALT accepts a dozen coins as collateral including Bitcoin, Ether, and Litecoin, and you can choose one or more of the offered collateral types to secure your loan. SALT also offers flexible loan terms, allowing you to choose your desired loan-to-value ratio from 30%-70% (amount borrowed divided by the value of your crypto), the duration of your loan (3–12 months), and whether you’d like to receive your loan proceeds in fiat or stablecoin. Interest rates are competitive, too. By taking out a crypto-backed loan, you can secure the funds to start a new business or operate and improve an existing one without selling your crypto.

Accept cryptocurrency payments

Another way that a business can generate further capital is to accept payments via cryptocurrency. For instance, Business2Community claims that businesses can lower the transaction fees involved during payment transactions due to the high number of peer-to-peer processing networks accepting popular coins. Compared to traditional methods like wire transfers and check payments, cryptocurrency can be a lot faster and more efficient. In addition, cryptocurrency transactions can be conducted directly between the business and the customer on the blockchain, which avoids the potential for third-party scams and external payment disputes. By accepting cryptocurrency payments, businesses can simultaneously grow their capital and streamline payment processes.

While there are significant risks that accompany cryptocurrency investments, doing your research and being diligent can help you significantly grow your business capital and fund new developments. Exploring different payment options and looking into specific coins can help you become more knowledgeable when it comes to determining the best way for you to start or operate your business.

 

SALT announces first-ever distributed custody model for securely storing collateral assets, onboards Fireblocks as first partner

This new model will allow SALT to distribute risk, enhance security, reduce interest rates, fund loans more swiftly, and focus on expanding its suite of wealth preservation products

We’re excited to announce Fireblocks, a platform that secures digital assets in transit, as our first partner for securely storing and transferring customers’ collateral assets. The partnership with Fireblocks marks a shift in SALT’s business model from self-custody to a more distributed custody approach that will allow us to onboard additional partners in the future and add greater flexibility for capital providers. This new approach also enables us to distribute risk, fund loans and conduct transactions more quickly, and provide customers with enhanced security for their cryptoassets, as well as lower interest rates on crypto-backed loans.

“When SALT was founded in 2016, custody wasn’t where it is now, so we built a proprietary custody solution to keep our customers’ collateral assets safe,” said Justin English, CEO of SALT. “Now that the industry has matured and companies like Fireblocks have come to the forefront, we’re excited to work with them to streamline our operations and expose their networks to our suite of wealth preservation products. They have a proven ability to safely and securely store and transfer collateral assets and to do so swiftly, which will inevitably allow us to provide faster service to our customers and focus more on product development.”

The move toward third-party custody solutions will also enable SALT to provide greater security and flexibility to capital providers that may prefer to work with a specific custodian, provided the custodian meets our rigorous security standards.

“MPC has quickly become the industry standard among the largest and most trusted institutions in the digital asset space,” said Michael Shaulov, CEO and co-founder of Fireblocks. “We’re proud to partner with the SALT team to help them strengthen security, reduce costs and expand operations as they move into the next stage of their growth.”

Fireblocks meets these security standards by combining multi-party computation (MPC) with Intel SGX technology to create a proprietary, defense in-depth approach to digital asset security — this allows organizations to accelerate operations without relying on physical hardware or slow, manual processes.

“Security is our top priority as we make this shift to be commensurate with our growth and distribute risk among trusted custodians,” said Dirk Anderson, chief technology officer at SALT. “The primary reason we’ve chosen Fireblocks as our first partner is because of their approach to MPC technology. Not only does it meet our security standards, but it will grant us more flexibility and increase the speed at which we can conduct transactions. This means we can fund stablecoin loans much faster and reduce the turnaround time for returning customers’ collateral assets once their loan has matured.”

From a customer standpoint, the biggest and most exciting changes to note are increased security, faster services, and the offering of lower interest rates. Aside from these changes, the customer experience will largely remain the same. Just as they do now, borrowers will still be able to make deposits and withdrawals, and will be able to continue tracking the health of their loan via our Loan-to-Value monitoring and real-time notification systems.

“We believe working with Fireblocks and other custody partners in the future is in the best interest of both the business and our customers,” said English. “Not only will we be able to offer more competitive interest rates, but we will have the time and resources to focus on expanding our offerings to include products that are designed to help our customers build and preserve their wealth.”

To apply for a loan or learn more about our suite of wealth preservation products, visit https://saltlending.com/getaloan/ or contact [email protected]. For questions contact [email protected].

About SALT

SALT, the pioneer of crypto-backed lending, offers a way for individuals and businesses to use their cryptoassets as collateral to secure a fiat or stablecoin loan without having to worry about credit checks. SALT offers flexible loan terms and accepts multiple cryptoassets as collateral including cryptocurrencies, stablecoins, and tokenized gold. SALT also offers competitive interest rates and does not charge origination or prepayment fees. As cryptocurrency becomes more widely adopted and additional real-world assets become tokenized, SALT’s mission is to offer solutions that make it possible for people to securely hold, manage, and borrow against their cryptoassets. Founded in 2016, SALT is headquartered in Denver, Colorado. For more information, visit www.saltlending.com or follow us on Twitter, Facebook and Medium.

All SALT loans are subject to KYC, AML, and other Terms, Conditions, and Restrictions. Please see saltlending.com/terms and FAQ for additional information. Loan options and terms may not be available in your jurisdiction, for your loan amount, and/or collateral type. SALT Loans are subject to jurisdictional limitations and other restrictions. SALT may not be able to offer a loan to all borrowers. SALT loans are originated by Salt Lending LLC. NMLS #1711910. NMLS Consumer Access (https://www.nmlsconsumeraccess.org/).

About Fireblocks

Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Fireblocks enables exchanges, custodians, banks, trading desks, and hedge funds to securely scale digital asset operations through the Fireblocks Network and MPC-based Wallet Infrastructure. They have secured the transfer of over $70 billion in digital assets and have a unique insurance policy that covers assets in storage & transit. For more information, please visit www.fireblocks.com.

Media Contacts

SALT

Kendra Staggs, [email protected]

Fireblocks

Yelena Osin, [email protected]

The Evolution of the Crypto Market and its Role in Asset-Based Lending

Originally published in ABF Journal

Cryptocurrency is a disruptor. Not only has it changed the way we conduct business, but it has changed the way we think. The most obvious manifestation of how cryptocurrency has disrupted our thought patterns is in the way we think about money — about who issues it, how to transact with it, how to put it to work and how to keep it safe. It also has changed the way we think about our government, our right to privacy and our financial freedom. What’s less obvious is how cryptocurrencies are disrupting the way we think about and participate in asset-based lending. The advent of Bitcoin catalyzed the creation of a myriad of cryptocurrencies, many of which became viewed as assets, yet at the time, there was no way for crypto investors to unlock the value of these assets without selling them. This is the problem SALT’s founders set out to solve in 2016 and in doing so successfully, made asset-based lending as we once knew it a thing of the past.

Creating a New Asset Class

As Bitcoin began to experience wider adoption following its release in 2009, it became clear that some investors were purchasing crypto to trade on a daily basis while others were choosing to invest long-term, viewing Bitcoin more as an asset than as a spendable currency. As more investors adopted this long position and began to think of cryptocurrencies as an asset class in their own right, the term “HODL” emerged in 2013 on a bitcoin-talk forum and has since become one of the most commonly used words in the crypto vernacular. This HODL culture has grown significantly over the years and has evolved to where investors are buying, selling and trading these assets not only for themselves but on behalf of others. This activity has taken the form of crypto portfolios and crypto funds, which offer access to this new asset class for individuals and allow them to diversify their portfolios while eliminating some of the overhead of learning how to purchase and safely hold cryptoassets. By providing a way to collateralize cryptoassets to secure a cash or stablecoin loan, SALT provides opportunities for individuals, businesses and capital providers to build and preserve wealth.

How to Lend Cryptoassets

As the first-ever crypto-backed lender, SALT has developed the technology and processes required to successfully lend against cryptoassets, giving borrowers a way to unlock the value of these assets without selling them. Take Bitcoin for example. It’s one of many cryptoassets we accept as collateral on our platform, yet it makes up more than 80% of the collateral securing our loan book.

What makes Bitcoin a strong form of collateral? The answer lies in Bitcoin’s combined characteristics. Like gold, Bitcoin is scarce, fungible, divisible, transferable and durable. It is also extremely liquid given it is traded on global exchanges every day. Additionally, as a decentralized asset, Bitcoin is highly secure. All of these properties make Bitcoin both a viable asset and a highly efficient form of collateral that has piqued the interest of some of the largest financial institutions in the world.

One thing to note is Bitcoin’s volatile nature, which can pose challenges specifically for the ABL market. However, SALT’s risk management technology effectively manages this volatility. Our technology includes real-time loan-to-value (LTV) monitoring, margin call and liquidation triggers, real-time notifications and the safekeeping of assets through institutional grade custody solutions. For example, our loan-to-value (LTV) monitoring system tracks the prices of assets 24 hours a day, 365 days a year, providing borrowers with the ability to monitor the health of their loan in real-time. If, during periods of heightened volatility, a borrower’s collateral declines in value and their LTV breaches our margin call threshold, we protect the borrower by issuing a margin call that prompts them to take action to restore the health of their loan. Actions borrowers may take include paying down principal or depositing additional collateral to recalibrate their LTV to an appropriate level (70%). If no action is taken and asset prices continue to decline, SALT has the ability and the right to liquidate collateral assets to preserve lender capital. The overcollateralized nature of our loans combined with our risk management technology and ability to liquidate assets enables us to protect the lender, and as a result, we’ve experienced zero losses of principal to date.

Choosing a Crypto-Backed Lender

SALT’s business model is attractive to crypto investors (e.g. traders and asset managers) and businesses (e.g. mining operations and exchanges) for a few reasons. First, we provide access to liquidity, offering loans ranging from $5,000 to the millions. Typical use cases include businesses seeking working capital to fund operational costs and large capital expenditures, or investors seeking leverage, diversification or risk management. Second, since our model is asset-based and requires overcollateralization, we do not rely on a borrower’s credit profile and can fund loans within 24 to 48 hours, assuming the borrower meets our strict AML/KYC requirements. Third, customers know their assets are safely and securely held with institutional-grade custody providers for the duration of their loan. Fourth, our loan process is straightforward and customizable. We allow borrowers to lend against a single cryptoasset or a portfolio of cryptoassets and offer flexible loan terms, including durations ranging from three to 12 months, LTVs up to 60% for individual loans or up to 70% for business loans, and competitive interest rates ranging from 5% to 12% depending on the borrower’s jurisdiction, loan amount and LTV. While we are no longer the only crypto-backed lender in the world, we are one of the few that incorporate a human element into our business model. Unlike completely automated lenders, SALT offers both phone and online support, and assigns each customer a loan support specialist at the time of loan origination. These human touches positively impact a borrower’s experience with the platform; they know that by choosing SALT, they will always have the option to speak with someone about their financial needs.

The Evolution of the Crypto Market and Tokenization

Since SALT’s founding in 2016, the crypto lending market has grown exponentially. According to a report from Credmark, the crypto lending market reached $8 billion in total lifetime loan originations as of Q4/19 and has since surpassed $10 billion following Q1/20. These numbers not only indicate the growing demand for liquidity among crypto holders but also the growing interest among capital providers to get involved in the crypto market. For example, we’ve witnessed an influx of both crypto native (BitGo Prime and Genesis Capital) and traditional financial institutions (Silvergate) that provide leverage and liquidity vehicles at the institutional level.

Another thing to consider regarding the evolution of the crypto market is that as the world becomes tokenized, the very definition of the term “crypto market” is changing. With the emergence of companies like Paxos and Harbor, we’re beginning to see increased tokenization of real-world assets like gold and real estate. At SALT we already accept Pax Gold (a gold-backed cryptoasset) as collateral on our platform and our vision for the future goes well beyond our current collateral scope.

The Role of Alternative Investments

As crypto becomes more widely accepted, a growing number of people are assessing their own risk profiles and determining the best way for them to participate in the crypto market. For those with lower risk profiles, the market has evolved in recent years to offer individuals or businesses indirect exposure to this new asset class. As previously mentioned, crypto portfolios and crypto funds are part of this evolution along with alternative investment companies like Cadence (portfolio company of Coinbase Ventures). Cadence is a securitization platform for private credit that grants access to exclusive high yield, short term investments traditionally reserved for institutions. In February 2020, we partnered with Cadence to offer prospective investors the opportunity to gain exposure to cash flows associated with a portfolio of underlying loans collateralized by cryptoassets. The first note of $500,000 was oversubscribed in five days and we have since worked with Cadence to issue $2.9 million in notes to investors to date. As more companies like Cadence provide structure, liquidity and indirect exposure to alternative asset classes like crypto, we expect to see even greater demand from investors seeking attractive risk adjusted returns.

Opportunities for Institutional Investors

There’s no doubt cryptocurrency has changed the way we think about asset-based lending. It has formed a new asset class and also has catalyzed the trend of broader tokenization — a trend that will inevitably expand the universe of collateral options and have a meaningful impact on the ABL industry. If you’re a decision maker at an institution and are interested in learning more, email [email protected] to discuss opportunities to build and preserve wealth in this rapidly evolving industry.

A CBDC Crash Course: Can sovereign-focused digital currencies become a monetary reality?

By Rob Odell

Article originally published on ValueWalk

China’s central banking system officially launched large-scale testing of what could be the world’s first digital sovereign currency. The People’s Bank of China, the nation’s central bank, is working with main banks in major cities, with a focus on digitizing the renminbi. During this trial, users register their mobile phone numbers for access to digital wallets. Through that access, they can use digital currency, issued by the central bank, to withdraw and transfer money, and to pay bills.

If this test is successful, it means that China could be one of the first countries to develop and maintain central banking digital currency, or CBDC. But China’s move toward CBDC doesn’t necessarily mean that other countries’ central banking systems will, or can, automatically follow. Moving an economy from bills and coins — whether physical or virtual — to 100% digitization isn’t something a country just does. Furthermore, there is the question of whether central banks can — or should — work directly with consumers and businesses, in direct competition with commercial and investment banks.

As such, the CBDC reality is a few years away.

Defining Digital Currency And Central Banks

Mention the words “digital currency” and the first thought that might come to mind is Bitcoin.

Certainly, Bitcoin, Ether, Litecoin, and other cryptocurrencies are digitized value exchanges, which can be used to buy goods and services. But cryptocurrencies and central banking digital currencies are two very different sides of the digital coin. While cryptocurrencies are privately developed and distributed, CBDCs are government-backed sovereign currency systems, complete with appropriate denominations. In other words, think digitized fiat currency, overseen by the central banks.

Much like cryptocurrencies, however, CBDCs are recorded on digital ledgers, which keep track of ownership and transactions by users with ledger accounts. But unlike cryptocurrencies, these ledgers would be overseen by central banks, which would also issue the currencies and process transactions.

Speaking of central banks, these institutions have big-picture monetary goals for the nations in which they operate. The above-mentioned People’s Bank of China, as well as the U.S. Federal Reserve, Bank of England, Deutsche Bundesbank, and others are responsible for national monetary policies. They also deal with the nation’s commercial and investment banks, as lenders of last resort. They aren’t in business to work with consumers or businesses.

Just because central banking systems don’t work on the commercial level, it doesn’t mean they haven’t. In writing for the National Bureau of Economic Research (NBER), economists Michael Bordo and Andrew Levin pointed out that central banks’ histories are filled with examples of interactions with consumers and businesses, and “often, these activities were considered more important for the central banks than the conduct of monetary policy, both in terms of daily operations and the priorities of top management.”

For example, the Bank of England conducted general business and consumer banking activities during the 17th and 18th centuries. And, in the United States, a highly successful post office savings bank system operated from 1911 through 1967, using the post office network to offer government-backed deposit accounts and other financial services. In many cases, postal banking performed central banking functions — such as funding two world wars — before the Federal Reserve stepped in to determine national monetary policy.

Digital Sovereign Currency Structure: The Theory…

Researchers and scholars have been pondering the idea of centralized digital currencies for a few years. The most recent study along these lines was released in June 2020 by the Federal Reserve of Philadelphia, and entitled “Central Banking Digital Currency: Central Banking for All?” Led by University of Pennsylvania economist, Jesús Fernández-Villaverde, the authors explored whether a central bank, such as the U.S. Federal Reserve, could successfully implement a 100% digital sovereign currency structure, which could realistically compete with commercial financial institutions without too much disruption.

The authors determined that, in theory, and absent any kind of financial panic, a digital conduit between central banks and consumers might be effective in optimizing fund allocations. Furthermore, a direct-to-consumer sovereign digital currency could help streamline and potentially eliminate current time-consuming and costly payment systems.

Bardon and Levin also suggest that central banking systems could offer digital currencies to the general public through specially designated accounts, opened in partnership with commercial banks. The banks could keep corresponding amounts of commercial funds in segregated reserve accounts at the central banks. Furthermore, setting up a CBDC infrastructure would be a straightforward process. Thanks to the internet, brick-and-mortar branches wouldn’t be necessary.

So, in theory, a CBDC is workable.

Now, The Reality…

China is pushing ahead to set up the first bona fide, workable CBDC. Meanwhile, other central banking systems, including the Bank of England, Bank of Japan and the Swiss National Bank, are working with the Bank for International Settlements (BIS) on additional CBDC research.

But the BIS cautions that jumping on the CBDC bandwagon right now will mean bumps in the road, mostly in the forms of security, convenience and accessibility. The current coins-and-bills banking system has sophisticated infrastructures in place to handle peak demands for money, and can support potential bank runs. Then, there are the questions about privacy and potential data breaches. Take for example, a situation in which the Federal Reserve issues $1 million to an individual’s stablecoin address. That individual then spends $100 from the same address at an online retailer.

Right now, with the way most blockchain technology functions, that retailer can look at that stablecoin address and see without question that there is nearly $1 million in the account. Cryptocurrency proves that while blockchain technology is great for anonymity, it is far from private. We must find a way to bring the same level of privacy to CBDCs as we currently experience with traditional banking, so that it is both private and public in all of the right ways. Until then, CBDC will likely remain more of a futuristic vision than become a reality.

And, from a larger-picture perspective, Fernández-Villaverde and his colleagues caution that the move to CBDCs could give central banking systems monopoly power, siphoning business away from commercial banks. Commercial and investment banks are set up to support maturity transformation — in other words, using consumer and business deposits for longer-term loans, such as mortgages. Central banks don’t have the capacity to do this; such a lack could be dangerous to economic policies.

Keeping It Cash … For Now

Though the Chinese central bank is experimenting with sovereign-backed digital currency and centralized ledgers, the CBDC concept isn’t close to implementation. Even China is phasing in CBDC very slowly. Coins and bills will be with us for a while longer, at least until security, accessibility and privacy issues — not to mention potential monopolization scenarios — can be worked out.

Still, the increasing use of cryptocurrency continues to prove that digital mediums of exchange are workable. As the People’s Bank of China continues working with sovereign-backed digital exchanges, other central banks will likely examine their own regulatory, legal and technical risks to determine the feasibility of CBDCs.

July Update from SALT

In case you’re not a subscriber to our newsletter, we want to share some of our favorite highlights from July right here on our blog to help keep you up to date on all things SALT.

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How Financial Firms Navigate the Markets to Grow in Any Climate

SALT was featured on Adroll’s blog alongside Catch Benefits and Hippo Insurance. Learn how we’re navigating the markets and changing the way people interact with money in the full blog post here.

Read Adroll’s full blog post here


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ICYMI: SALT Announces Justin English as Chief Executive Officer

In case you missed it, we recently announced that Justin English has been named chief executive officer at Salt Blockchain Inc., parent company to SALT Lending. Co-presidents Rob Odell and Dustin Hull, who have been working together for the past six months to fill the CEO role and onboard English, will remain co-presidents and will continue to support SALT in their respective roles as chief product officer and chief financial officer.

Read the full announcement here.


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Creative Wealth Preservation with Blockchain Center

Our CPO Rob Odell joined Blockchain Center’s VR Crypto Mondays to talk with their CEO about crypto lending and creative ways to preserve your wealth.

Watch their full discussion here.


We Want to Hear From You

Share your feedback with us by rating our content and/or leaving a comment on our “What’s New” feature.

Share your feedback here


Black Lives Matter

As operations at SALT carry on, it is not lost on us, as a company nor as individuals, that Black Americans continue to fight for racial justice. We are committed to hearing, learning from, and supporting our Black customers & communities in this fight for a more inclusive world.

Want to stay up-to-date on all things SALT? Signup for our monthly newsletter herehttps://cdn.forms-content.sg-form.com/76a45090-a050-11ea-8926-5efcf9d8f941

Questions about our products and offerings? Contact [email protected]

How to Protect Yourself Against Phishing and SIM Swapping Attacks

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As cybercriminals are becoming more sophisticated, their attacks are becoming increasingly challenging to defend against. Two of today’s most concerning types of cyberattacks for cryptoasset owners are phishing and SIM swapping. Phishing accounts for 90% of all social engineering incidents and 81% of all cyber-espionage types of attacks, while SIM swapping, although less common, can cause equally devastating effects. Cryptocurrency holders in particular, are attractive to black hat hackers and are uniquely vulnerable to phishing and SIM swapping attacks — here’s what you need to know to protect yourself.

Protecting against phishing attacks

Phishing is a socially-engineered cyberattack that is primarily used to obtain sensitive information including as usernames, passwords, bank/credit card details, or public and private keys to cryptocurrency wallets. The vast majority of phishing is done through email but it can also come through texts/SMS, social media, and chat services. Disguised as a trusted entity, the perpetrator tricks you into opening a message containing a malicious link or attachment. The links will typically then lead you to copycat sites resembling webpages of banks, payment processors, or online crypto-wallets. These sites are designed to trick you into entering your usernames and passwords.

There are also phishing scams that specifically target cryptocurrency holders. In most instances, the attackers masquerade as some of the more popular online wallet services (e.g. Blockchain.info or Coinbase) and prompt you to give up your credentials. In other scams, emails may include seemingly relevant attachments containing malware that infects your device and stealthily scans its files, searching for private keys to a cryptocurrency wallet.

As a general rule of thumb, if you get an email you weren’t expecting, and if something — anything smells “phishy,” disregard it entirely. Additionally:

  • Consider anything that comes into your spam folder a red flag
  • Be aware of email spoofing, which is when an attacker makes an email look like it came from a legitimate sender. For example, an email can look like it came from whitehouse.gov but it will likely (not always) go into spam since the address is spoofed.
  • Attackers can also make look-alike domains using a Cyrillic character that looks identical but isn’t. Those may show up in your inbox (not spam).
  • Always check the authenticity of any URLs included in the email and beware of URL redirects.
  • Avoid reacting impulsively to any calls to action (downloading attachment files or replying with any sensitive information). Keep in mind that phishing attacks are designed to make you feel a sense of urgency to respond.

Preventing SIM swapping

SIM swapping is a type of account takeover attack whereby the perpetrator breaks the two-factor authentication (2FA) security protocol by hijacking your telephone number. The attack usually starts with social engineering; scammers gather your personal details (e.g. full name, address, phone number) and call your mobile phone provider pretending to be you. Using various social engineering techniques, they then convince the wireless carrier employee to port your phone number to the attacker’s subscriber identification module (SIM).

After they’ve successfully hijacked your phone number, usually just by asking for a password reset, the attackers can break into any of your accounts — email, bank/online wallet account, and others that require a call or SMS 2FA. If your phone suddenly becomes unable to make or receive calls, you may be a victim of a SIM swapping attack and should take immediate action.

To avoid becoming another SIM swapping statistic, refrain from using your phone number with 2FA where the second factor is a call or SMS-enabled authentication. In fact, if you can, avoid giving your phone number to your email or other service providers entirely. Authentication apps like Google Authenticator or Authy are a much safer alternative, as they’re tied to your physical device instead of your phone number.

If you must provide a phone number to access a specific service, contact your cell phone provider about extra layers of security for preventing number porting. Some carriers provide additional layers of security. Also, make your standard pin something random and store that pin in a secure place like a password keeper.

Safeguard your crypto assets and personal information

Ownership over cryptoassets is established solely through digital signatures (public and private keys). Couple that with the irreversible nature of blockchain transactions and you get a potential recipe for disaster. If an attacker gets ahold of your keys or your recovery phrase, whether that’s through tricking you into abdicating them yourself (phishing) or by forcefully porting your phone number and breaking the 2FA of your online wallet (SIM swapping), the result will always be the same: your funds will be lost forever.

For these reasons, taking the precautionary steps to protect your accounts, your online identity, and, ultimately, your cryptocurrency holdings, is worth the extra effort.

May Update from SALT

In case you’re not a subscriber to our newsletter, we want to share some of our favorite highlights from May right here on our blog to help keep you up to date on all things SALT. Image for post

Event Follow-Up with SALT’s CPO

We want to thank everyone who watched & participated in Bitcoin Magazine’s Halving live-stream celebration with us last month. To address some of the questions that came up from the event including questions regarding the SALT token, our CPO Rob Odell sat down with one of their team members for a follow-up video. You can learn more about the changes we’ve made to the SALT token from our blog post, New Changes Add Value for SALT Supporters.

Watch the full follow-up video here


Coins vs. Tokens

Ever get tripped up on the differences between coins and tokens? Our latest infographic breaks it down.

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We Want to Hear from You

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We have recently added an option to our “What’s New” feature for you to share your feedback on our content. You can share your thoughts by rating our content and/or leaving a comment.

See what’s new at SALT here.


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Twitter Poll Results: Bitcoin Pizza Day

On Bitcoin Pizza Day we asked our Twitter followers in a poll what they would do with 10,000 bitcoin, and these are the results. You can participate in our next poll by following us on Twitter.

To see the results on Twitter, click here.


Refer a Friend

Get $50 in bitcoin for you & your friend when they take out a crypto-backed loan. To learn how you can refer your friends, check out our blog post Pass the SALT, Grow Your Wallet.


Black Lives Matter

As operations at SALT carry on, it is not lost on us, as a company nor as individuals, that Black Americans continue to fight for racial justice. Until racism is eradicated completely, we are committed to hearing, learning from, and supporting our Black customers & communities in this fight for a more inclusive world. As we reflect internally on the immediate changes SALT can make to support this mission, we have proactively chosen to make Juneteenth a company holiday to honor the significance of June 19, 1865.


Want to stay up-to-date on all things SALT? Signup for our monthly newsletter herehttps://cdn.forms-content.sg-form.com/76a45090-a050-11ea-8926-5efcf9d8f941

Questions about our products and offerings? Contact [email protected]

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