YOU CAN READ THE FULL ARTICLE HERE:
https://medium.com/@ArrogantPeacock/the-salt-lending-presale-explained-1c18a58df24fSALT Lending
What a fantastic name for a fantastic product. There have been a lot of discussions about collateralizing tokens and SALT (Secured Automated Lending Technology) is offering exactly that. In a nutshell, instead of selling your tokens (Bitcoin, Ethereum etc.) to finance short or long term obligations, you “store” these tokens in the SALT platform as collateral, and receive the corresponding value of those tokens in cash, deposited to your bank account. A simple, innovative and technologically advanced solution that can easily compete with outdated traditional banking loans, crippled due to their complex, expensive and bureaucratic loan process.
There are so many innovations coming from SALT, that it would be hard to list everything here.
What is of greater interest however is the “distribution” of the SALT Membership tokens and specifically the “Discounted Sales” which is the biggest stake of the total SALT Membership allocation (45.42%).
SALT intents to sell 1 Membership for $10.00 when the service launches
As the time of writing, the presale is still open and offers the following discounts:
2 million Memberships for $3.00 each
1.5 million Memberships for $5.00 each
1 million Memberships for $7.50 each
This means there are 4.5 million ((2 + 1.5 + 1 = 4.5)) “discounted” Memberships currently available
For the total sum of $21 million ((2 * 3) + (1.5 * 5) + (1 * 7.5))
These 4.5 million Memberships sum 8.26% of the entire 54.5 million “Discounted Sales” allocation that has been “available”
So…what about the 50 million Memberships ((54.5–4.5)) that were distributed up until now?
You might have noticed how harmless “Membership” sounds instead of using the word “token” or “asset”.These 50 million Memberships are 91.74% of the entire “Discounted Sales” allocation; you would expect to find some sort of information regarding their distribution. I would like to spare some of your time, and tell you that such information is not available. SALT has never officially announced their presale. For a company that lists one of their values as “Trust”:
You would expect some transparency, openness and community engagement — which are prerequisites for trust.
The entire presale distribution is based on none of that. It begs the questions whether a fair portion of this 91.74% has not been distributed or bought by insiders for ridiculous $0.01 discounts per Membership, or might have even been bought by SALT themselves via third parties. The company has complete control over the demand of its “discount” Memberships; the only way to buy into these discounted tiers is if SALT has verified your account, which they can do at whatever rate and pace is convenient to them, that would allow the company to buy their own supply and “adjust” demand accordingly (by verifying accounts later). Why would you sell a Membership for $3.00 if the demand clearly exceeds that value, you would simply buy it yourself and let anyone in line pay $5.00 for it, at a later point in time (note that SALT has not set specific dates for their presales, they simply announced the sales five days before they take place).
The “investors”, who would think they are buying “discounted” tokens are actually paying a premium for them (there have been apparently other presales before this tier discount of $0.25, $0.75 and $1.5 / Membership). To make our calculations conservative, we’ll use as a base discount of $1.5 / Membership, as previous discounts could not be confirmed, which would translate to:
Anyone buying the “discounted” rate of:
$3.00 — pays a premium of 100%
$5.00 — pays a premium of 233.33%
$7.50 — pays a premium of 400%
Damn… and the public sale has not even started
This all might be rubbish of course, and the analysis above might be incorrect. Asking a legal expert affiliated with SALT would surely help to clarify things. Fortunately, SALT has a Telegram group which anyone can join, unfortunately, anyone mentioning anything about previous discounted tiers will get banned. After asking Emma Channing, legal expert and executive vice president of The Argon Group (SALT’s legal and crowdfunding partner) about the early distribution allocation, the following reply ensued “the numbers are the numbers”. Three seconds later my account was banned. There have been other users who were banned from the group, who were unfortunate enough to have the same concern as I did.
Nevertheless, as already mentioned, SALT is something special and provides a fantastic product to a multi trillion dollar worth industry. There will definitely be enough interest and the company will not have a problem raising the funds that it needs, but the discount sales allocation is something that will haunt the company in the long term and we might experience some display of contempt against the project in the future.
Pass me the salt *throws it off the table*
