SALT Stabilization: How it Works

I’ve Been Stabilized. What’s Next?

When your Loan-to-Value ratio (LTV) exceeds 90.91%, we stabilize your loan by converting all of your volatile assets into stablecoin (USDC).

At this point, you will notice that your USDC wallet reflects the total US Dollar value of your combined portfolio. Each collateral wallet balance will show $0. Don’t panic!

How Do I Convert Back to My Original Assets?

To get your original assets back, you will need to manage your LTV and restore the health of your loan to a safe state (83.33% LTV or lower). To do this, follow these steps.

Navigate to the Loan Status page or click “Manage LTV” in the notification module on the dashboard.

2. Manage your LTV by either depositing more crypto or making a one-time payment in the Manage LTV Module.

We recommend curing your LTV to a healthy state (<70%), but as long as you have managed it to 83.3% or below, you will be eligible to convert.
Navigate back to the Loan Status Page. You will see that your LTV has dropped, but you are still being held in Stabilization Mode.

In the Manage LTV module, you will notice that you are now eligible to convert. Click “Convert Now” to convert back to your original assets or to a mix of any assets we accept as collateral.

The convert tool will default to the percentages of your original collateral mix. You may edit this and convert back to a different collateral mix if you’d like.
Click “Next” to review the details of your conversion and then click “Convert Now” to confirm. Once confirmed, you will have successfully reverted back to your asset mix of choice.

Still have questions about stabilization?

Please call our support team at +1 (720) 575–2272.

Legal Notice: Please be sure to review your Loan Agreement for additional information. The liquidation or conversion of pledged assets could result in adverse tax consequences. You should consult your tax advisor in order to fully understand the implications associated with pledging digital assets as loan collateral. Notwithstanding a general policy of giving you notice of margin deficiency, we are not obligated to do so. We may convert or liquidate pledged assets in your account without notice to you to ensure that minimum maintenance requirements are satisfied. If Salt Lending sells or converts some or all of your assets, such transactions made on your pledged collateral assets are accepted or rejected in Salt Lending’s sole discretion and may be at prices higher or lower than your initial acquisition cost. In the event of a liquidation or conversion, Salt Lending may choose to sell some or all of your assets to an affiliate of Salt Lending at applicable market rates.

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.

June Update from SALT

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

New Platform Feature

We’ve recently updated our platform to include a new feature that allows users to view all of their accounts in one place. If you have multiple accounts with SALT, you will be able to see this new feature after logging in and can navigate back to this display via the drop-down menu in the top left-hand corner. Please reach out to [email protected] with any questions.

How to Protect Yourself from Phishing and SIM Attacks

Did you know phishing & SIM swapping are two of the most common cyberattacks targeting crypto holders? Our blog post explains how you can protect against both types of attacks.

Read the full blog post here

We Want to Hear From You!

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

Share your feedback here

SALT, Wherever You Go

Monitor your loan-to-value ratio and loan collateral details on the go with the SALT mobile app.

Download on Google Play or the App Store

Black Lives Matter

At SALT, it is not lost on us, as a company nor as individuals, that Black Americans continue to fight for racial justice and many of the day-to-day freedoms a lot of us take for granted. 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 here!

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

New Changes Add Value for SALT Supporters

After identifying and evaluating new ways to add value for SALT Membership Unit (“SALT”) supporters, we’re excited to announce that we’re 1. now accepting SALT as collateral for a cash or stablecoin loan and 2. switching from a staking model to a redemption model.

How will this work when the price of SALT varies across exchanges?

Since Binance and Bittrex delisted SALT in February and May respectively, we’ve been searching for a valid third-party pricing source by which to value SALT. We define valid exchange pricing as the trading price on an unmanipulated market where the trading volume is high enough that a sufficient number of buyers and sellers can establish a price at which to transact. We determined that Binance and Bittrex were the only two exchanges to offer a sufficient market for SALT to provide validity in the previous year. To mitigate this change in pricing validity, we have taken the 60-day moving average from Coinmarketcap.com, using the 60 days prior to the delisting announcement by Bittrex. Using this pricing mechanism, we are recognizing a price of $0.15 per SALT on our platform. If, in the future, SALT is listed on an exchange with adequate trading volume, accessibility, and market depth to provide us with price validity, we will immediately recognize such third-party pricing.

What does this mean if I’ve already staked SALT to secure a loan?

If you currently have a loan with us and you staked SALT to get a reduced interest rate, your SALT will automatically be recognized as collateral in your collateral wallet and your interest rate will remain the same.

What else can I do with my SALT?

We are moving from a staking model to a redemption model. This means that while you can still use your SALT to secure a lower APR on your crypto-backed loan, the new redemption program will allow you to redeem your SALT rather than stake it. The reason we’ve switched to this new model is to offer you value for your SALT upfront. From now on, you can redeem your SALT to reduce your interest rate for lower monthly payments (go to saltlending.com for loan terms and options). The amount of SALT required to do so depends upon the size of your loan.

What if I don’t own SALT?

If you don’t own SALT, these changes will not impact you. Our goal with switching to a redemption model and adding SALT as a collateral type is to reward early supporters of SALT by offering them additional ways to use their SALT tokens the way they were intended to be used — to engage with our lending platform.

SALT Adds Newly Released PAX Gold as Collateral Option in First Regulated Gold-backed Blockchain Asset

We’re proud to announce that beginning October 1, 2019, we will offer the just released PAX Gold (PAXG) as our latest collateral type for clients seeking to use their digital assets as collateral to secure a USD loan. PAX Gold, an asset-backed digital token on the Ethereum blockchain is Paxos’ first blockchain asset to represent precious metal; its value is tied directly to the spot price of gold quoted by the London gold market.

By tokenizing gold, Paxos is bringing the benefits of physical gold ownership to the cryptocurrency community. PAX Gold is built as an ERC-20 token on the Ethereum blockchain network. As a digital representation of physical gold, PAX Gold has the potential to increase the overall liquidity of gold by connecting traditional markets with cryptocurrency markets.

“Precious metals are ideal for tokenization. Gold, as an example, has well-established institutional physical custody and a broad base of investors familiar with the asset class,” said Jenny Shaver, Chief Operating Officer at SALT. “Gold has traditionally been held as a hedge against inversely correlated assets like stocks and fiat currency, so it provides digital token holders with familiar asset diversification options. By offering PAX Gold as our newest collateral type, we’re adding value for our customers by combining the benefits of gold investing with easy access to funds via crypto-backed lending.”

With the addition of PAXG, SALT customers will not only have a wider variety of collateral options, but by using PAXG as their primary collateral, they will be able to maintain a more stable Loan-to-Value Ratio for the duration of their loan.

Founded in 2012, Paxos is a regulated financial institution with a suite of products including the most traded alternative USD-backed stablecoin, the PAX Standard. By integrating PAX Gold as the first widely available physical asset available on a blockchain, we’re taking a step toward realizing our financial vision of a blockchain-based system where the value of traditional assets can be unlocked and used in manifold ways.

“PAX Gold is the first regulated digital asset that allows holders to own the underlying physical gold,” said Scott Simpson, VP of Strategic Partnerships at Paxos. “Unlike fiat currencies, gold has intrinsic value and Paxos allows users to physically redeem their PAX Gold tokens for actual gold. With PAX Gold, people can more easily access this market and with SALT, customers can easily leverage gold like never before.”

“We as a community have been discussing the tokenization of commodities for quite a few years, but Paxos has been the first to make it a reality by representing gold on the blockchain. This is a big step forward for the crypto industry. This brings a new level of transparency to traditional investors by enabling them to see their physical gold represented on the Ethereum blockchain, meaning they can immediately verify ownership,” said Rob Odell VP of Product and Marketing for SALT. “SALT is proud to be a part of this advancement by offering PAXG as a collateral option for crypto-backed loans. Not only does it invite traditional investors to become SALT customers, but it will enable us to be more flexible and creative with our LTV options and loan terms. In fact, if we see significant demand for this product, I think SALT is prepared to re-evaluate our interest rate calculator and open the doors to LTV options as high as 85%.”

Gold has historically been a popular store of value, with the price of Gold increasing by an average of 10% per year since President Nixon took the US Dollar off the gold standard in 1971. With a worldwide market capitalization above $3 trillion, gold is physically scarce, widely traded and offers high liquidity — three key factors that make it not only a viable asset to lend against, but a salient collateral choice for us. Given the current instability in the bond and currency markets, gold’s long-term returns are more comparable to stocks and higher than bonds or commodities.

With the addition of PAX Gold, we now offer loans collateralized by Bitcoin, Litecoin, Ether, Dash, DOGE, BCH, PAX Standard, USDC, and TUSD.

SALT, Dash and Staking: SALT’s Rob Odell Interviewed by Dash News

Recently we announced the support for Dash as collateral for loans, a feature we were excited to release given the demand from you along with the cryptocurrency’s potential to further financial inclusion around the globe.

Our VP of Product and Marketing, Rob Odell, recently spoke with Dash News about the platform, noting that $100,000 worth of Dash could secure a loan up to $70,000 — perfect for situations where you require cash but are reluctant to sell your cryptocurrency.

Rob qualifies the addition of Dash as “one of the most innovative inclusions that we’ve worked on since the launch of the platform.” We’ve integrated it in such a way that, while custody of the Dash itself is delegated to our platform, you retain the masternode rights so you can continue to earn payouts and voting rights from staking. With comprehensive insurance and the benefit of not commingling assets, this further ensures that SALT can provide you with highly secure storage options — something that may be more convenient and less risky than taking custody into your own hands.

This ability for you to maintain your masternode status, while utilizing your assets as collateral is an industry-first, and Rob dives into this further with Joël.

Listen to the full interview for more details and follow these step-by-step instructions to custody or borrow against your Dash with us and still run your masternode.

SALT Partners with NODE40 to Offer Fiat Loans for Dash Masternode Owners

As part of our commitment to supporting the Dash community, we’re excited to announce our partnership with NODE40, the blockchain masternode hosting and monitoring provider. The partnership will provide expanded loan options for DASH masternode owners in tandem with the Dash community’s first masternode hosting service.

Given its long-term viability, its numerous use cases, and its level of adoption, Dash is an appealing collateral form for SALT’s platform. In our April 2019 announcement, we affirmed our commitment to support the Dash community and its mission, noting our respect for Dash’s two-tier network that uses masternodes to maintain the viability of its blockchain.

“Our development team has made a technological breakthrough and has advanced our mission by unlocking value and liquidity in cryptocurrency assets through collateralizing the Dash connected to masternodes,” said Rob Odell, VP of Product and Marketing at SALT. “Dash has quickly become our second most popular collateral option behind bitcoin and the community has reacted positively with a high volume of loan applications. We’re excited to work with NODE40 to increase our support for the Dash community and provide innovative solutions and services for masternode holders to get the most out of their assets.”

A Dash masternode serves to expedite transactions and scale the network by relaying them over a second-tier network. While Bitcoin’s second layer is an off-chain solution to scale, Dash runs an on-chain second layer using masternode operators who are incentivized by the network like miners in bitcoin. In March 2015, NODE40 was the first company to provide network infrastructure to host masternodes. According to dash.org, each masternode pays out approximately six Dash (currently just over $1000 USD) per month in mining rewards.

“Our companies’ shared dedication to customer service naturally brought us together when a mutual client wanted to take out a fiat loan using their masternode’s Dash. What attracted us to SALT was the caution with which things are done; they have a solid reputation of doing things by the books,” said Perry Woodin, Co-Founder and CEO of NODE40 and a Dash Trust Protector. “Having been a part of Dash from early on, we tend to do things conservatively, and that was important to us when evaluating how a loan is backed and if our customers would be protected in the case of an audit. With SALT we share the vision of being cutting edge while playing by the rules not only to protect ourselves, but to bring legitimacy to the industry.”

DASH holders must prove ownership of 1,000 DASH to obtain masternode status and have the right to vote on treasury proposals and receive recurring payouts. However, if at any point, the Dash is moved, the node will be brought offline and will downgrade immediately, stripping the node of its master status. With SALT’s new system, Dash holders can move their Dash to our platform and maintain their masternode status as well as their voting and payout rights, all while using the associated funds as collateral for a loan.

The key to this software integration comes from a recent Dash update, DIP3, which introduces pro registration transactions. Instead of referring to another transaction from the network to sign a message as proof, a “proreg tx” refers to an output produced by the transaction itself, which in turn acts as proof of ownership. Dash holders can now collateralize the Dash connected to their masternodes by parking their funds in our insured cold storage — the signature used to move those funds validates ownership, allowing users to continue participating in the network.

Crypto — Coming Into Its Own

By Jenny Shaver

A look at indicators of industry maturity and assessing the right kind of investment risk.

(This article is adapted from a keynote speech delivered at the April, 2019 Crypto Invest Summit.)

I often get asked, whether it’s by former colleagues, or people I meet at social events, or even my dad, “Why would people invest in crypto? It seems risky.”

Depending on your investment strategy, sure, it’s risky. But…it’s a different kind of risky than it was even two years ago.

So, what’s changed?

Crypto asset performance isn’t correlated to any other asset class. It doesn’t move with fiat inflation or commodities prices. It’s not tied to the performance of a company like a security. That inherently creates risk but also opportunity for significant gain. This is a risk that we as an industry weather and accept.

The perceived risk my dad is referencing has less to do with crypto asset volatility and more to do with the perception that the crypto industry reflects the lawless, undisciplined behavior and unbridled speculation akin to the caricature of the wild west.

This perception is inaccurate.

I was having a conversation with a colleague about this very topic and he said,

“Our industry isn’t in a state of chaos like The Wild West. Our industry is more analogous to The Space Race.”

John F. Kennedy said of The Space Race, “We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard.”

Blockchain technology attempts to solve previously unsolvable problems. The complexity of the technology and the nascent nature of the regulatory framework, requires new and emerging expertise. It requires risk takers to set new precedents.

This pursuit has resulted in a pouring in of talent and capital which have given rise to increasing competition and meaningful industry advances. We are seeing this manifest via several indicators of industry maturity.

Broader Adoption

Despite the crypto winter, or bear market, or whatever we want to call 2018, we saw a nearly doubling of the amount of individuals who hold crypto assets. A survey published by Forbes suggests that crypto holders are skewing older and more affluent than previously thought.

UTXO analysis conducted by Delphi Digital suggests that most crypto holders who held a position longer than five years largely sold off their holdings, partly contributing to the downturn, but clearing the way for new investors seeking engagement with new types of products.

From an institutional perspective, traditional financial services and crypto financial services are converging. We are seeing validation of crypto assets in traditional companies incorporating crypto services or blockchain infrastructure.

Institutional adoption also extends to partnerships and service providers for crypto companies. Just in the past 12 months, I have seen an increased willingness of vendors and service providers to work with crypto companies. Companies who were saying “no” to providing services for us 12 months ago, are now actively trying to work with us.

Compliance

US-based crypto companies have made significant strides to create risk and compliance programs that are comparable to traditional financial institutions.

This includes a robust KYC/AML program, customer data protection standards, SOC compliance, compliance monitoring of blockchain addresses, and dedicated resources to oversee compliance programs.

As our industry attempts to navigate its purpose of removing barriers for transferring value, even regulatory barriers, compliance programs at this stage of our industry maturity, are a necessary step for broader adoption and mitigation of regulatory risk.

Insurance

Insurance has been a hot topic as of late because it’s a relatively new advancement in our industry. But it’s meaningful.

The fact that insurance providers are willing to underwrite affordable insurance policies for crypto-specific operations is a strong indicator that we as an industry are demonstrating the safety of holding crypto assets.

I urge investors to ask critical questions about the specifics of insurance programs — the coverage amount, incidents covered, and the claims and payout process and timeline.

The good news is that as our industry continues to prove itself, the competition amongst insurance underwriters will increase, which, in turn, will drive down costs.

Market Data Integrity

Our industry is dealing with our own data integrity issues just like any other high volume, high velocity industry.

Recognizing these gaps and the dependence on reliable market data to drive participation, there has been a surge of data research companies dedicated to improving the quality of market data.

The recent incident of BitWise calling out CoinMarketCap for overstating trading volumes, is a great example of our industry’s maturity in this area.

This is significant not just because companies like BitWise are expending resources to conduct due diligence on our industry’s leading data providers, but also because of CoinMarketCap’s acceptance of accountability to address the issue and improve their product.

It demonstrates that we are holding ourselves to a higher standard, and that investors will have increasingly accurate sources of information to make informed decisions.

Response to Scalability Challenges

JPMorgan announced earlier this year that it is investing in its Quorum blockchain infrastructure to facilitate payments in a more efficient manner using its dollar-backed JPM Coin.

It’s currently being piloted with a few institutional clients but is promising to revolutionize their payment processing.

To realize this potential will require blockchains to dependably support concurrent transactions at a scale that is not yet possible, or at least not yet largely practiced and tested.

Our industry is investing significant resources to solve this problem, and promising solutions are surfacing.

A second layer protocol solution, Lightning Network, is perhaps the most exciting advancement in the race for scalability.

For crypto to deliver on its potential of revolutionizing the transfer of value on a global scale, it must rise to meet the challenges of scale.

We’re working on it.

More Sophisticated Investment Products

What I see as the most exciting indicator of market maturity is the increasing diversification of product offerings.

Interest-bearing accounts are seeing promising early performance, futures and options are now available on select exchanges, as is trading on margin, and ETFs are on the near-term horizon.

What I have seen is an industry response to the unique nature of crypto assets and the needs of crypto holders. In crypto lending, for example, simply offering a crypto-backed, USD loan, does not address all market uses cases.

If 2018 has taught us anything it’s that we need products that drive market engagement in both bear and bull markets.

Our industry now offers several ways for investors to participate — directly through investing in crypto assets, less directly by offering fiat capital pipelines for interest-based products, or indirectly through investing in the growth of crypto companies and projects.

These options are allowing for a wider breadth of investor participation with varying risk appetites.

I return to the question, “Is crypto investing risky?”

When we empower a company like Charles Schwab to manage our wealth portfolio, we know there is some risk in the investment strategy but we don’t worry about them losing or mismanaging our money.

There are enough responsible companies in the crypto industry that can provide the same amount of assurance about the handling of your crypto assets. I encourage investors to seek out reputable companies and ask tough questions about their operations due diligence. Watch how companies respond to industry incidents like a hack or key compromise event. Our industry is still young and we’re still learning our vulnerabilities. The good companies will have a disaster recovery procedure that cure customer losses.

We have seen what happens when more resources are deployed to our industry. The result is more talent, innovation, and increasing sophistication that results in better products and better opportunities for investors.

Everyone wins.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of SALT Lending.