SALT Lending has issued $ 40 million in asset-backed loans that are aimed at cryptocurrency investors to give them some liquidity without the need to sell assets.
The company launched its first loans at the end of 2017 after two years devoted to the development of technology to make loans work. SALT Lending is based on a multi-signature wallet that allows the counterparts in a transaction to access the account and a software service that marks the value of the cryptocurrencies that remain as assets.
Founded by Blake Cohen, a former real estate executive for his family’s business, SALT Lending is Cohen’s first foray into cryptocurrency entrepreneurship.
Cohen says the idea of service was apparent. “Cryptocurrencies and blockchain assets are the ideal guarantees,” says Cohen. In typical asset-backed loans, the assets must be located, seized and liquidated so that the lenders become complete. With cryptocurrencies, all those problems disappear, says Cohen.
Most of the capital that SALT is lending comes from the company’s assets, and through SALT Blockchain Asset Management, which is a fund with several individual partners.
Currently, the company is providing services to individual borrowers, but Cohen foresees a time when exchanges, miners and great startups with tokens can obtain additional liquidity through secured loans.
“The current market limit [for cryptocurrencies] is $ 400 billion, and that’s wasted, that’s a huge inefficiency in the market,” says Cohen.
Currently, the company offers loans for 36 months and (depending on the investment to value ratio) the company will lend up to 60 percent of the value of the cryptocurrency guarantee, says Cohen.
Interest rates on loans range from 12 to 22 percent, says Cohn. SALT Lending is only lending against Ethereum and Bitcoin for the time being.
“The money we put in is like proof of concept to attract institutional capital providers to get involved with this,” says Cohen. “This is one, to demonstrate that there is a market for this, and two, that you can do this and make the risk acceptable to the lender.”