- 9 лет ago
- Published в: Last winner ethereum
- 0
- Автор: JoJojar
The company is regulated and holds numerous lending, collection and loan servicing licenses. Payouts are available in both cash and stablecoin. Prepayment penalties and bank-style origination fees are waived. The interest rates vary based on the selected loan term and LTV. The platform also functions as an insured cold storage wallet, and hosts its own SALT token which users can leverage to decrease loan interest rates among other things. The company lends in the United States and internationally, to individuals and institutional entities such as mining businesses and hedge funds.
The company has live customer service, client support and best-in-class compliance programs to meet the needs of its users. The SALT Platform was designed with the volatility of cryptocurrency and wealth preservation in mind. In the event of a margin call, assets are automatically converted to a stablecoin in lieu of liquidation, a unique feature in the lending space.
Here's how it works: When a loan reaches a forced liquidation LTV, instead of immediately selling collateral assets to restore the health of the loan, the SALT Platform converts some portion of the collateral assets to a stablecoin thus preserving collateral value.
Once the health of the loan has been restored, the borrower can ask to convert the loan collateral back to the original cryptocurrency assets, such as BTC, ETH, LTC, etc… This gives users the opportunity to convert assets as the market is coming back up, creating the potential for users to not only preserve wealth, but grow it. Notwithstanding a general policy of giving borrowers notice of a margin deficiency.
The system may liquidate or convert pledged assets without notice to borrowers to ensure that minimum maintenance requirements of the loan are satisfied. The liquidation or conversion of pledged assets could result in adverse tax consequences. SALT advises borrowers to consult their tax advisor in order to fully understand the implications associated with pledging digital assets as loan collateral.
SALT has a fixed supply of ,, tokens. It performs a number of user-related functions and is freely tradable outside the platform. The Salt Platform holds assets within insured cold storage and is responsible for the security of its networks and user funds.
Within the Salt Platform, keys are generated offline, stored offline, and transactions are signed offline, which the company reports drastically reduce cyber security threats as keys are never exposed to a network-connected device. The multi-signature security process ensures that no single party can move user funds. However, if bitcoin's price declined significantly, the loan-to-value ratio would increase.
The borrower would have to provide more collateral by depositing an additional amount of the cryptocurrency or the borrower would need to make a payment to reduce the outstanding loan balance. The loan-to-value ratio is tracked by a smart contract, which autonomously calculates and updates the ratio throughout the life of the loan based on the changes in the price of the digital asset held as collateral and the various payments made by the borrower.
Dollar-based stable coin—a process called automatic stabilization. Once the loan-to-value has been reduced to The stabilization process helps to preserve the value of the cryptocurrency assets held as collateral during market downturns. Stabilization also provides the borrower with time to decide when they want to re-enter the market and purchase the original digital asset.
Loan Terms, Interest, and Fees The loan term can range from three months to 12 months and SALT does not charge an origination fee for setting up the loan. Borrowers are charged interest on the loan, as they would be on any other loan, and the rate charged across all loan terms is currently 9.
However, the rates and terms are subject to change, which can vary based on several factors including the loan amount, qualifications, and collateral. Also, there is no interest earned on the deposited funds held as collateral. SALT loans allow borrowers to maintain ownership of their blockchain assets, while also gaining access to cash via a loan. If a borrower plans on holding their digital asset over the long term, or the value of the crypto has increased significantly, a SALT loan provides the borrower with access to cash without having to liquidate their digital assets.
As a result, the borrower can still participate in any market moves higher for the digital currency that they own. Despite the new type of collateral, the factors to consider when borrowing money from any kind of company remain much the same.
Anyone interested in taking out a personal loan should first use a personal loan calculator to determine the amount they can afford to repay each month. How Do Crypto Loans Work? A cryptocurrency-based loan is facilitated through digital collateral.
The borrower pledges digital assets i. The borrower then incurs interest on unpaid loan amounts. What Is Loan-to-Value? Like many other loans, a crypto loan must be held in balance regarding loan-to-value term requirements. This means if the borrower's collateral declines in the value, the borrower may be at risk at having their loan principal called back.
Loan-to-value is the ratio between the size of the loan and the value of the secured collateral. If either the loan or the collateral are in assets with variable value i. What Are the Risks of Crypto Lending? Cryptocurrency loans are at risk of smart contract security failures and custodian security issues.
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