Client Spotlight: Justin Podhola, Founder and CEO, Elite Mining Inc.

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We learn a lot from the people who use our platform every day and enjoy collecting their feedback so we can use it to continue improving your experience with SALT. We spoke with our business client Justin Podhola, founder and CEO of Elite Mining Inc. — a company that generates mining capabilities through clean energy.

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I’ve had quite a few years of trading experience overall. I started out trading on the US Stock Exchange over 10 years ago. Following that, I worked in real estate, building homes and flipping houses. I’ve always been a tech junkie, but I never really had a good place to put my knowledge and skills to work. Eventually one of my buddies asked me if I’d ever heard of Bitcoin, and while I was really interested in the technology, it didn’t make any sense to me at the time because I didn’t take the time to understand it. I started doing some research on it in 2016 and in early 2017 I decided to go ahead and take a chance on cryptocurrencies, and spent my life savings to start mining. I’m so glad I did because I’ve been so much better off because of it, and I’m able to contribute to an ecosystem that really resonates with me as a person.

Throughout the past couple of years, we’ve found there’s a strong need for proof of work and proof of stake, especially right now in the current markets for a lot of the smaller coins. They need more infrastructure built around them. Based on this research, I founded Elite Mining Inc. in late 2017. The business is profitable, but at the end of the day, the most important thing is that we’re able to provide security for blockchains. This market is ever-evolving and we’re looking forward to seeing where it goes.

The current narrative around mining is that it’s going to harm the planet in the future — I’m really focused on not only squashing this notion, but on becoming the leader in clean and profitable mining. Bitcoin is sound money, and for our new cryptosphere to really lead the next generation of miners, we have to be focused on both reducing emissions and securing Dnet blockchains.

The sentiment is that being green with clean / renewable energy ends up losing you profits, but prior to founding the company, we conducted about six months’ worth of due diligence before we chose the state in which we wanted all of our facilities to be located. We wanted to be located in a geographic area that would allow us to scale into the hundreds of megawatts range and simultaneously be nearly 100% clean in our energy consumption for POW and POS (Proof of Work and Proof of Stake). Specifically and what ultimately made our decision is the fact that Washington State is the leading hydroelectricity-producing state in the nation, without a close second, but yet inherently has some of the lowest electricity rates in the entire world.

Washington State is inherently 91 to 92 percent all clean energy, which is the reason we chose it for our business. We looked at other states including New York, Montana, and Texas, but ultimately I was already living in the best state for what we wanted to do. The biggest pain point for renewable energy and mining is figuring out how to scale with it — we knew that operating out of Washington would allow us to do that. Having made this decision, we’re able to take advantage of some of the best electricity rates in the world and constantly deploy renewables on a distinct time scale within our operations to maintain the backbone of our operations, and at the same time lower our electricity costs in perpetuity.

There are a few things that drew me to SALT. The first thing was the branding — I thought it was absolutely clean and genius. The SALT brand reminds me of Nike because it has a simple logo with strong meaning behind it. It’s a straightforward concept and given the colors and themes are good, I thought the company had a strong possibility of selling itself well. The next thing that caught my attention was SALT’s platform — it was extremely unique in the way the company built its tokenomics and membership benefits out of the SALT token. That really intrigued me, and as I conducted additional research, I learned early on that while I needed to cover the costs of electricity and of buying more rigs, there’d come a point where I’d want to try and keep as much Bitcoin and Ethereum as I could. I anticipated future appreciation, so I didn’t want to sell my assets. I figured that using SALT would put my business at an advantage because we could HODL all of our Bitcoin and Ethereum, use it as collateral, and generate additional income as a result of long-term appreciation. We don’t know where Bitcoin will be in two to three years, but by that point, if I hadn’t decided to do something like this now and use SALT to HODL my crypto, I would lose essentially 30–40 percent of my holding coin assets by having to sell them off to continue running my business. For me, using SALT was a no-brainer.

First of all, the SALT loan is enabling us to hold our assets, which is the most important attribute. Our most valuable assets are our Bitcoin and Ethereum, and while we also mine other coins, we’re able to sell into Bitcoin and Ethereum. Now that we’ve implemented SALT into our business model; we’re going to consistently contribute more to our BTC and ETH wallets on the SALT platform by adding more collateral over time. I can continue to add collateral as I go along, instead of paying bills directly by selling my Bitcoin and losing that future appreciation value. Then into the future, months down the road if I need cash, want to expand the company, ramp up operations for more rigs, or move to a new facility, I have the liquidity to be able to do so, yet I can still hold at least good chunk of my assets. To me that’s a powerful tool that’s going to add a lot to our company.

Yes, and actually my second loan would likely be a personal loan. I’m bullish in the market right now and believe the market has leveled off for the most part, which triggers the trader signal in me for a green light to reduce margin calls and to be optimistic on long range trends for the value of my cryptocurrency.

First of all, it’s important to do your due diligence, but I’d recommend going to SALT because they have a professional team and are an excellent company overall. They don’t waver in their terminology, and they’re good at communicating. Most importantly, they have excellent customer service — you can get ahold of them at any time.

There are a lot of scams out there, and there are a few lenders I would be careful of because they don’t have insurances in place if something were to happen to their lending solution. Knowing SALT has insurance is what gives me the confidence to take out a loan because at the end of the day I know they’re making sure to be extra cautious for their customers and that they have my best interests in mind. Additionally, security is number one, and I feel confident that SALT has an extremely secure platform, they have built their products on chain. SALT has developed their own tech stack, obtained their own licenses in the US and abroad, and they have an absolutely awesome SALT app on their phone that allows me in a blink of an eye to view and manage my assets via Smartphone 24/7/365. Through this ownership of these assets they have built, it allows them to really offer solutions to future clients that can grow in the foreseeable future. These aspects combined with their fast response time is why I would recommend them to someone looking for a crypto-backed loan. I’ve had experiences with other lenders and relatively speaking, they’ve been a little slow to get back to me. Given this is the 21st Century, I like things to be fast.

  1. I love the automated margin call system. It enables me to be hands-off, so I don’t have to worry about checking my loan every single day. I’m a very busy person, as I’m currently running two businesses and have a wife and kids. I don’t want to be checking my computer every day for my LTV, so to me the automated margin system alone is worth choosing SALT — time is money.
  2. It’s extremely easy to apply for a loan. It took me just a few minutes to slide the scale over and figure out how much collateral I wanted to use and then two minutes to complete the application process. SALT responded quickly to me after I submitted the application.
  3. The platform is simple. It’s clean, and there’s not a lot of jargon to comb through, which makes it significantly easier to go through the loan process.

One thing I think might be hard for people to understand and may prevent them from taking out a loan is that at this point, it takes a lot of collateral to back your loan — potentially more than the average person would expect. However, what’s important to understand is that it’s an emerging market and SALT has a certain level of responsibility to its investors and lenders, so overcollateralization of your loan is a necessary precaution for the time being. They’ve compensated for this recently by coming out with new, ridiculously good interest rates.

I would choose Dash — I think it’s a no-brainer. Dash has great market penetration right now — it has a strong following and is a no-nonsense coin. I also think Zcash would be another decent choice, as it is garnering quite a bit of adoption currently as well.

SALT at ETHDenver 2019

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As SALT has developed the technology necessary to support our lending business, we have opted to build a lot of our supporting services in house. As you scoff at why we wouldn’t just buy something off the shelf, remember how new the blockchain ecosystem is relative to other industries. We like to think we’re rational and always properly weigh our buy vs build options. After exploring the options, and in some cases buying them (much to our dismay), we’ve had to rely primarily on our talented dev team to build the systems, services and applications necessary to run our business.

Through many conversations with other blockchain companies, we have come to understand that some of these services would be valuable to helping build their business. Our first effort at separating a service and making it available to the public was a blockchain address and transaction monitoring service called Meerkat. You know, because Meerkats are always on alert.

The service allows anyone to subscribe (and unsubscribe) to specific Bitcoin, Litecoin, Dogecoin, and Ethereum (plus all ERC-20) blockchain addresses and transactions. Once you subscribe to a given address (or multiple addresses), you’re notified via your provided callback URL of transactions in or out of the address you’re watching. Subsequently, you can subscribe to a transaction so that you can be notified of its status updates (detected, mined, confirmed, etc).

To put this effort to the test, we chose to offer a $5000 prize at the 2019 ETHDenver Buidlathon (hackathon) for the best use of the Meerkat service.

There were some really creative submissions and we’re grateful that teams thought something we’d built could be useful to their project.

Ultimately, we picked Charity Watchdog as the winner because it supports the open and transparent ideals inherent to cryptocurrency. Their idea gives users the power and insight to choose whether or not to support a particular charitable organization. This is cryptocurrency at its finest. We hope Charity Watchdog continues their endeavor to bring transparency to charity spending. Below are some additional details about their project and a few other teams we want to give a shoutout to for creatively using Meerkat to BUIDL their project.

Thank you to each team for all of the creativity, hours and effort you put into leveraging Meerkat for your projects. We’ll see you all next year! In the meantime, keep watching via www.meerkat.watch.

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Director of Product Experience Rob Odell answers buidler/hacker questions at the SALT table at ETHDenver.

SALT’S CHOSEN WINNER:

Project: Charity Watchdog

Team: Artem Kuznetsov, Peter Gao

Description: Charities are traditionally opaque with their spendings, with donors not knowing exactly where their money is being spent.

With Charity Watchdog, we bring accountability and transparency to charity spends by watching the transactions of charity wallets, and prompting the charities to provide receipt or some form of documentation as to where the money was spent within a grace period.

Any charity that is on the platform and does not provide proof of fund usage will be flagged for donor review. This gives users insight into charity spending and they can choose whether or not to support the charity based on its spending, proof of usage, or lack thereof. This helps put donors more in control.

How they used the Meerkat API: Charity Watchdog used Meerkat to watch and update their app as transactions were sent to various charities. It was the key component in being able to notify users in the app that a charity has spent funds. It’s then the charities’ responsibility to add the supporting evidence for transparency.

OTHER NOTABLE PROJECTS:

Project: Shares

Team: Mark Evans Josh Robinson

Description: Shares seeks to demystify the stock issuance process for startups by facilitating the creation and issuance of uncertificated shares in the form of ERC-20 tokens. You don’t need paper certificates, a spreadsheet, or a lawyer. Just five minutes and a wallet address!

The project used IPFS for hosting the dApp portion of Shares, which is responsible for creating an ERC-721 token (one per company) that represents ownership of their domain on DwNS (Decentralized Web Naming System) and provides an easy-to-remember URL (ex. acme.shares.dwns.io). Uncertificated shares are subsequently minted through an ERC-20 contract and are sent to a user-designated Ethereum address. The view layer for the dApp was made using VueJS. For the web app portion, they used NodeJS and Express and connected to the Twilio and Meerkat APIs.

How they used the Meerkat API: Shares combined Twilio and Meerkat to notify users via text message when shares were moved from a contract. The team passed the phone number into the callback URL so that any transaction alerts on the security contract would get sent via text message — an instant way to alert users of activity.

Project: ETH Dev Tools

Team: Aidan Musnitzky, Billy Rennekamp, Theo Ephraim

Description: ETH Dev tools is a chrome developer tools extension that acts like a swiss-army knife for dApp developers and curious users. The extension appears in a chrome inspector tab and comes with various modules that introspect the current dApp you’re using. The plugin is easily extensible for additional tools but already comes with four fully functional modules:

Logs — A network inspector that shows logs and details of all network interactions between your dApp and your RPC endpoint via the web3.js provider including request timing, parameter inputs and return values.

ABI Explorer — This section keeps a list of all contracts the dApp has loaded and scaffolds boilerplate forms based on the ABIs of those contracts. The auto-generated UI gives you access to all contract methods ready to be queried with calls and sends — this is similar to what’s possible with Remix or a verified contract on Etherscan, but without the context switching or compilation.

GraphQL Explorers — A GraphQL explorer that comes pre-populated with Infura’s EthQL endpoints as well as all of the most popular The Graph subgraphs including Uniswap, ENS, Dharma and others. These endpoints come with sample queries ready to ping all the most relevant and highly available content. There’s also the option to add a custom endpoint for easy access to any other available datasets.

Watcher — A tool for monitoring activity on any wallet address or contract. This service is provided by a websocket proxy listening for webhooks from SALT’s Meerkat. It’s easy to subscribe or unsubscribe to this data with a simple UI and websocket support from an Heroku instance.

How they used the Meerkat API: The ETH Dev Tools team creatively added Meerkat to their ETH dev tools chrome extension to more easily help dApp developers subscribe (or unsubscribe) to an address or a transaction right from their browser. For dApp developers, this helps speed up the troubleshooting process when trying to monitor and notify users of address activity.

Project: Balanced Crypto Portfolios with built-in investment capabilities automation

Team: Anibal Catalan, Leonardo Lower, Manuel Garcia

Description: Automated balanced portfolios hedged against DAI with investment capabilities to get returns from loans repayments from AAVE.

Hedge your crypto portfolio and lower overall risk due to volatility and correlation behavior by moving out part of it into a stable asset: MakerDAO DAI.

Build a balanced portfolio, they will rebalance it for you.

Don’t stop there, invest some DAI into a fund which will invest by funding loans in EthLend based on clear rules (eg.: amount, duration, MPR, LTV, etc).

Get returns from the loans repayments.

We provide you with bots and brokers that will take care of rebalancing and investing on the right loans.

How they used the Meerkat API: This team used Meerkat to subscribe and monitor wallet activity. This is fundamentally important for projects in the #DeFi, or decentralized finance, space as the main pillars of this movement are accessibility, financial inclusion and transparency. Meerkat makes it possible for users to be notified of all payout and rebalancing activity.

Project: Battle Bombers

Team: Franky Aguilar, Mark Pereira, Drew Harding

Description: Taking the mobile crypto experience to where it should be.

The makers behind Battle Bombers are taking the concept of mobile-first crypto applications to users and developers. Battle Bombers uses an architecture that accesses the full native extensions in mobile ecosystems, which really stretches the capabilities of cryptocurrency on mobile. This application shows that app developers and designers will be able to fully express their creative abilities on mobile platforms without restriction.

How they used the Meerkat API: This team was able to use Meerkat to provide their users of push notifications with an alert regarding activity on specific addresses associated with the games they were playing on their phones. Once alerted of activity on an address, Battle Bombers sends that alert to the user in the form of a push notification.

Project: ETHBackpack Team: Josh Forman, Peter Hendrick, Ron Stoner, Sean Martin

Description: Live, on main-net chain, IT certifications and degrees. Show you have certificates such as CCNA, AWS Certificate, Certified Bitcoin Professional with an ETH Wallet address.

ETHBackpack can allow companies that distribute professional certificates on the Ethereum blockchain. Contract deployed on main net.

Individuals seeking employment or contract work can show their credentials in a public, verifiable way. Employers seeking to hire professionals could potentially search for applicants that have the certifications they’re looking for and verify such certifications.

How they used the Meerkat API: This team used Meerkat to notify users and watchers of a specific address that it had been updated with a new certification or degree.

SALT is Looking Forward to Meeting You at EthDenver 2019!

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SALT is proud to sponsor and participate in EthDenver 2019. Not only is the conference right here in our own backyard, but it’s one of the largest crypto gatherings in the world. It’s inspiring to see creators, developers, and crypto enthusiasts come together to hack and build something great — EthDenver creates an opportunity for that.

We know that some of the brightest people from across the globe — including Andreas Antonopoulos — will attend this year’s event and we’re excited to meet you all, especially those of you who we think could be excellent additions to the SALT team.

Speaking of the team, we’re excited to have multiple representatives from SALT partake in everything from speaking to judging to hacking. SALT’s co-founder and Chief Knowledge Officer Caleb Slade will be sharing his perspective and experience in the crypto lending industry on a panel titled, “Banking without Banks: Loans on the Blockchain.” He’ll also be serving as one of the judges for EthDenver’s Open track. Additionally, members of SALT’s developer team will have a strong presence at this year’s event. While some of them will be participating in the #BUIDLATHON, others will be judging SALT’s bounty project (stay tuned for details!).

Have we convinced you to join us? Maybe we have, maybe we haven’t — we’ll be there Ether way!

To learn more about SALT, visit saltlending.com, or to check out our newest product launch, visit www.meerkat.watch. If you have questions or would like to connect before, during, or after the event, shoot us an email at [email protected]

Loan to Value (LTV) Explained

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When you apply for a traditional loan, the lender uses your credit score, as reported by third-party credit agencies, to determine your credit worthiness or financial “reputation.” The higher your credit score, the lower the risk. To offset your credit score or in some cases even completely remove it from the equation, you can apply for an asset-backed loan. With this type of loan, you can offer up your assets — anything from your house or car to your stock portfolio — as collateral to act as “insurance” for the lender. In asset-backed lending, borrowers typically secure loans for an amount that’s less than the total value of the collateral.

The measurement of the balance of the loan relative to the value of the collateral asset is represented as loan-to-value or LTV. For example, you may have a loan for $320,000 for a home that is valued at $400,000, in which case your loan is 80% of the total value of the home.

As an asset-backed lender, one of the things that makes SALT unique is that we don’t even look at your credit score. With a SALT loan when you have collateral — whether you’re unbanked, haven’t accumulated credit, or have poor credit — you can still get a loan. Instead, SALT uses loan-to-value of your collateral to assign risk. As LTV is a measure of risk, the lower the LTV, the lower the risk for the lender (and therefore the lower the interest rate for the borrower).

How is LTV calculated?

Good question.

LTV is calculated as the loan amount in USD divided by the value of the collateral in USD, expressed as a percentage.

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As an example, if you have a current loan balance of $100,000 and your total collateral asset balance is $200,000, you have an LTV of 50%. To make things easier, we’ve added an LTV Helper to the borrower portal that illustrates exactly how the LTV is calculated. See below.

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Understanding LTV and how it’s calculated is essential to making an informed decision about your loan terms. Liquidation events benefit no one, which is why we provide the tools like our automated notification system to help you avoid them. Before you apply for a loan, you should ask yourself:

  • How much do I need?
  • How much total crypto do I have?
  • Am I prepared to deposit more crypto if necessary to lower my LTV?

Once you answer these questions, you can choose the LTV that’s right for you.

Starting LTV

When you are taking out a loan against your crypto assets with SALT, you presently have 3 options for your starting LTV; 30%, 40% and 50%. The starting LTV will determine approximately how much (in terms of dollars) of the crypto asset you will need for that loan.

From the example above, for a $100,000 loan, you would need $200,000 in Bitcoin, Ether, Doge, or Litecoin to secure the 50% LTV loan option. For a 40% LTV, it would be $250,000 and for 30% LTV, it would be approximately $333,333.

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Using LTV as a measure of risk, the 30% LTV option is the lowest risk.

Why is a lower LTV seen as less risk?

As the LTV goes up, the value of the underlying asset goes down. In the case of a crypto asset-backed loan, the value of Bitcoin, Ether, Litecoin, or Doge is trending down.

If the price of the crypto asset falls too low, the LTV will continue to increase. As it approaches 100%, there is a threshold where the collateralized asset will be sold to pay back the loan. This is known as the liquidation threshold. This threshold can vary from business to business and loan to loan.

For our example, let’s say the liquidation threshold is set to a 90% LTV.

When the LTV ratio reaches 90%, the crypto asset will be sold to reduce the LTV back down.

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Timeout. Liquidations!?!

At SALT, we pride ourselves in having a robust notification system that relays important account activity to borrowers via our portal, text, phone calls, and emails. We give you control of how you want to be notified about each activity. You can be notified of everything from deposits and withdrawals to LTV warning thresholds.

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As a borrower, you always have the option to transfer more collateral at any time.

Back to LTVs.

Why does this matter?

As you might be aware, the price of Bitcoin (or any crypto asset) can move up and down. As the price moves up, your LTV goes down. As the price moves down, your LTV goes up.

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To build on our earlier example of a $100,000 loan with a 50% LTV, let’s use Bitcoin as the underlying crypto asset. In this example, let’s use $4,000 as the US dollar price of 1 Bitcoin.

Loan Amount = $100,000

Starting LTV = 50%

Price of 1 Bitcoin = $4,000

Doing the math $200,000/$4,000, you would need approximately 50.00 BTC to get a $100,000 loan with a 50% starting LTV.

Bringing it all together!

From above, assuming the liquidation threshold is set at 90% LTV, the price of 1 Bitcoin would need to go all the way down to approximately $2,222 to raise the LTV up to the liquidation threshold of 90% LTV.

A $100,000 loan with a starting LTV of 40%, would require 62.50 BTC at a price of $4,000 per Bitcoin. However, the 90% liquidation threshold would not be reached until the price of 1 Bitcoin went down to approximately $1,778.

Repeating the example with a 30% LTV, you would need 83.33 BTC at a price of $4,000 per Bitcoin and would reach the 90% liquidation threshold when the price of 1 Bitcoin was approximately $1,333.

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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