I'm struggling to see how SALT can disrupt the loan circuit, or to bring much to the table to be frank, other than "it's lending...
using a blockchain!" Lending using your cryptos as collateral may be attractive to some, though, as it will allow them to gain interest on their crypto holdings (or to be more accurate, to lend against your cryptos to invest elsewhere).
TLDR: SALT is only useful for people who already have crypto or fiat they can put away for the duration of the loan, but not at all for those who can't. One third of its total supply has been already sold at pre-sale at rock bottom prices. It is unclear who benefits from the storage on collateral.SALT is trying to replace credit scores with collateral (which must be BTC, ETH or SALT). This means only people with collateral will be able to get loans on Salt Lending. So if your credit score is awful but you have collateral (read: you have money but are bad at managing your payments), you can get a loan on their platform. But if your credit score is great and you don't have any collateral (read: you're poor but pay your dues on time), you don't get a loan, period. At least at a traditional bank you can get a loan.
This does not set the world on fire, and I don't see it being a positively disruptive force, as it will not give greater access to loans for those without means, and will merely benefit those who already have money/cryptos. Could be a great source of funds for margin trading, and for whales who HOLD cryptos and want to get additional leverage from them, but not very useful to help poor people. I may be underestimating the potential for the former two types of people and the platform in general, but there are other issues with the token.
First, the supply. One third of total SALT 120m token supply was sold in pre-sale at $0.25 or $0.75 (from a
reply in SALT ANN thread). They are now selling at $7.50, and when the current round ends they will set at no less than $10.00. This poses a rather attractive incentive for the early investors to dump.
Another concern is the collateral storage. According to the
FAQ on collateral:
A portion of the collateral will be held in a highly secure, multi-signature “hot wallet” for the purposes of managing collateral valuation volatility. The remainder will be held in cold storage. I'm sure this hot wallet will be rather large in total value, so who gets to keep the interest from all this stored collateral, which may generate very significant income? Is it Salt Lending, lenders, the debtors, or someone else? I haven't found the answer.
Lets say you currently have a $100,000 mortgage and are paying 3.8% interest.
You could take out a $20,000 loan for 3 years with SALT at let's say 3%.
Your mortgage is now $80000 and you are paying less monthly which can be used to pay off your loan.
3 years later you do the same thing - by now the loan rate is 1.5% as SALT has increased in value and recognition.
Eventually you've paid off your loan early saving you $$$ and you still have your cryptos at the prices in 3 years.
That's completely wrong. You don't take out or pay loans with SALT, you pay them off with fiat. If you default you lose your collateral which is BTC, ETH, or some other crypto allowed by the platform. SALT is used to pay for membership (1 SALT per year or more), and it may be used as collateral.
Also, every number in the example is is pulled from a hat since none of the platform's financial factors has been made public or even set yet AFAIK, so it is utterly meaningless.
