What is SALT Lending?
On episode 72 of LAB Radio, we are joined by Rob Odell, VP Product and Marketing from SALT Lending to discuss what’s new with SALT.
SALT is a lending platform that uses crypto as collateral. It’s a simple yet brilliant platform to allow users to leverage their existing crypto portfolio to leverage against a fiat loan.
How does it work?
For example, you own 5 bitcoins and need $25K to put a new roof on your house. Let’s assume 1 Bitcoin is valued at $10K and you believe Bitcoin will rise in value from $10K to $50K in the next 3 years. Instead of selling 2.5 BTC, you could leverage your 5 BTC at a 50% Loan To Value (LTC) ratio. You would receive a $25K interest only loan with minimal interest payments due monthly and the balance due in the last month of the loan.
Let’s say Bitcoin never reaches $50K, but it does hit $25K at 24 months into the loan. In this scenario you could close out your loan by selling 1 BTC instead of the original 2.5 BTC you were going to have to sell.
On the flipside, if Bitcoin never goes up and actually drops to $5K, the value of Bitcoin you have locked up in collateral is now only worth $25K. When the loan was originated it was set up to maintain a 50% LTV ratio, the loan is currently at 100% LTV. This adds significant risk to the lender.
To correct the out of range LTV, 3 things can happen. You can add more bitcoin to the collateral to bring the loan back down to a 50% LTV. You can make a one time stablecoin payment or your collateral can start to be liquidated to cover your loan.
“SALT is not in the business of liquidating your crypto.” -Rob Odell
The second part sounds scary, as it should. No one wants to lose their crypto, that’s why they are taking a fiat loan in the first place. The pause that it gives to one’s decision making should be noted. A loan is not free money. Crypto doesn’t always go up.
However, if you find yourself in a situation needing cash, owning crypto and not wanting to part with it, SALT Lending is a possible killer solution.
Meet Rob Odell. He’s been with the company since 2017 and recently promoted to Vice President of Product and Marketing. Rob is very excited about the newest updates to the SALT Lending platform. The most significant of which include more business functionality and multiple users on business accounts.
SALT is originating more loans than ever. They actually have a lot of repeat customers. Since the terms of the loans range from 3-36 months, they have seen a lot of people take out test loans. They want to try a loan of a smaller amount before they get into a much higher leveraged position.
SALT has also worked very hard to bring insurance to their customers. There was a lot of basic education needed to make the insurance company feel comfortable with their processes. It took about 2 months and they had 2-4 office visits before they were given the insurance policy. “We wear it like a badge of honor,” says Rob Odell.
How Rob found crypto
Rob’s crypto journey begins in 2013 when he and his wife moved to Bali so she could pursue her dream as a SCUBA instructor. He became friends with some Ex-Pats and started going to meetups. At one meeting, he was introduced to a man who was purchasing local coffee from farmers, roasting it and selling it for bitcoin on the internet. Rob’s curiosity was sparked.
Before moving to Bali, he previously taught English in South Korea. He met Mike Facchin of Search Scientists and began helping him build his Ads business remotely. This allowed him to gain insights into marketing campaign management and ultimately to where he is today.
During this episode, Rob Odell explains:
- How does SALT approach traditional financial products education?
- SALT’s philosophy on product and process improvements?
- What crypto means in a relationship?
- His views on crypto adoption.
- What would he would change in the crypto and blockchain industry.
Further Reading and Resources