Until now, ending up with a wallet full of Bitcoin but devoid of cash has meant one thing. An intense period of clinging to our buttocks. I mean, nervously watching each price rise from the time we sold until we could afford to buy back. Or in my case, without ever getting to this point.
Now there is a solution for those of us desperately HODLing who at times sometimes find ourselves desperate for money. A start-up called SEL loan promises loans backed by blockchain-based collateral.
Not that it applies to me, but keep going
The concept is quite simple. SALT Lending, with its Secure Automated Lending Technology (SALT, see?), Connects you with a lender. You get a normal loan from a normal lender (FIAT) and the money is deposited into your account within a few days. You make regular payments and the loan is paid off.
Here is where it gets good
No credit check is required because the loan is secured by the collateral of your cryptocurrency. You don’t have to sell your assets, so any price increase is up to you. And you can spend the money on whatever you want.
The minimum loan amount is $ 5,000 (or the equivalent), and there is no maximum limit on the loan value. Of course, you must keep a margin on the value of your equity in the event of a fall in price.
I receive the money and I keep my Bitcoin?
Your Bitcoin or other blockchain-based asset must be transferred to a multi-signature wallet created by the SALT service. As soon as the loan is repaid, you will get it back.
According to the website, you might even miss a payment and they won’t grab you. They will simply take that payment out of your guarantee amount. Try to get this type of service through a standard loan service.
So what’s the catch?
The site promises competitive rates, although at this point these are not being announced. The exact rates will depend on various factors such as the loan amount and term, so this is to be expected.
Loans will only be available to members. There are three levels of membership, all payable in an exclusive room called SALT. The company is currently in an ICO-type funding phase, whereby it sells SALT tokens to investors. They call it a membership sale and have a soft cap of $ 35 million that they hope to lift.
seems like a good idea to me
Yeah me too. Time will tell how competitive loan rates and membership fees are, and how widespread the adoption and availability of lenders is. But at this point, I’m giving the concept a big boost.
Erik Voorhees (CEO of Metamorphose) is an advisor to the board and he is certainly delighted that the project has come to fruition.
So looking forward to seeing this project see the light of day. People will no longer need to liquidate Bitcoin for cash. https://t.co/i9dPWh9AiK
– Erik Voorhees (@ErikVoorhees) Aug 15, 2017
What Impact Could Salt Lending and Crypto Asset Backed Lending Have on the Lending Industry? Let us know what you think in the comments below.
Images courtesy of SALT Lending, Shutterstock