Bitcoin "No-Liquidation" Loans💰SALT Interview

SALT Lending is a platform that allows users to borrow cash or stablecoins by putting up their cryptocurrency, such as Bitcoin, as collateral, enabling them to access liquidity without selling their digital assets. 

Guest: Dr. Hunter Albright, CRO at SALT

~This Episode is sponsored by SALT~
Borrow on SALT Now! ➜https://bit.ly/pbnsalt

00:00 Intro
00:30 Lending Growth
01:00 SALT Lending Framework
02:20 Who is this for?
04:15 SALT Shield
06:00 Liquidation limit?
06:45 How are you different from Morpho?
09:00 Business features
12:15 Loan maintenance
14:40 Borrowing against other assets
16:00 What can I do with my loan?
17:50 Book: The Bitcoin Advantage
21:00 Outro

#Crypto #Bitcoin #Ethereum
~Bitcoin "No-Liquidation" Loans💰SALT Interview~
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Episode Transcript

Speaker 1 (00:00):
Let's dive into crypto lending today and how you can
do it and do it with the best practices. My
name is Paul Barrett. Welcome back into the show. I
wanted to get into it today. A lot of people
have been watching How to Take Loans on your Crypto
because one of the best things you kind of concern
yourself with is should I take those capital gains? Should
I sell my asset? If you're a long term holder,

(00:21):
this is one of those ways to basically tap into
that wealth. If you look at the current lending protocols
out there, this growth has really started to expand over
just the last year. Since twenty twenty four, we saw
TVL around thirty billion. Now this is of course exploded
up to one hundred and twenty seven billion. So the
point is is there is a lot of growth in

(00:42):
lending as a protocol overall. So we wanted to bring
in one of our partners today to kind of dive
in a little bit deeper on this, bringing in doctor
Hunter Albright coming in from Salt.

Speaker 2 (00:52):
Great to have you, Hunter, Great to be here, Paul.

Speaker 1 (00:55):
All right, so let's get into a little bit about Salt.
Give our audience a framework of what you guys are
trying to do there. How this applies to taking loans
on your crypto specifically bitcoin.

Speaker 3 (01:10):
Yeah, I'd be happy to so. Seawan Owen, who is
our current CEO and one of the co founders of Salt,
really started this out of a personal need and a
personal challenge that he had about twenty fifteen, went to
get a loan against a lot of bitcoin and other
digital assets that he had accumulated and was declined by

(01:31):
a bank in terms of being able to use that
those assets as valuable collateral, and that really set him
down a journey about establishing SALT and building it and
bringing it to the market. And so Salt launched in
twenty sixteen and we have ever since then really been
working to provide capabilities to help people access the value

(01:55):
of the bitcoin and other digital assets that they're accumulating.

Speaker 1 (02:00):
When you look at building a company around this, obviously,
bitcoin and in general crypto lending is brand new to
a lot of investors.

Speaker 2 (02:08):
Maybe they've never thought about it before.

Speaker 1 (02:11):
It's something that they're starting to kind of venture into
because of the exposure we're seeing in the market. But
as far as the kind of customers that are doing
this now most of the time these are people who
are holding bitcoin obviously, but the bigger question is can
anyone do this? Is it something for a small investor
as well as a medium or a large investor.

Speaker 3 (02:33):
I really think so, And we're seeing the landscape start
to change and really shift. So traditionally, you're right that
it's the people that have been born against their digital
assets were people that were early into bitcoin and early
into the crypto space in general, and they needed a
way to tap into the value of their assets, and

(02:54):
so they started to pursue loans. As we are seeing
greater exposure to the awareness of bitcoin and the value
continuing to go up, we're seeing more and more people
want to come in as a way of growing their wealth,
whether that is an individual or whether that's a business.

(03:14):
And the other thing that we're seeing globally is just
generally investing in a home is becoming harder, both in
terms of the price point as well as in terms
of how early you can do it, and so we're
seeing a lot of twenty year olds and thirty year
olds thinking about, well, if I can't put money into
a house, in build wealth and build an asset that way,

(03:36):
how else can I do it? And bitcoin is generating
a lot of interest as a asset class to build
wealth with.

Speaker 1 (03:45):
Well, let's get you know, something that we talked about
earlier in the week is digital assets have kind of
become the new American dream. You know, it is the
way in which what we will will see in terms
of dollar debasement start to make their way in. And
of course, the next layer, once you're beyond the idea
of an asset going up in price, then the next
factory is is how do you actually yield from it?

(04:07):
You know, do you go park it in a yield
bearing account? Do you take loans against it so you
can go out and use it? That's where you guys
come in. Talk to me a little bit about I'm
looking at your website right now, and one thing you
guys do that I think is probably the most unique
is Salt Shield.

Speaker 2 (04:23):
Explain to me.

Speaker 1 (04:24):
How you do this because this is one of the
biggest concerns I think everybody I talk to is they're
afraid of liquidation.

Speaker 2 (04:31):
How does this work with you guys?

Speaker 3 (04:33):
So, yeah, little me start with a little bit of context,
So you know, salt has been working to innovate downside protection,
you know, really throughout its journey within the space. And
so it initially salt launched a capability that we refer
to as stabilization, and this was, you know, at sort

(04:54):
of just shy of ninety one percent LTV, which stands
for loan to value ratio, assets would be converted into
stable coin to assure somebody didn't lose all their value
and get liquidated. We're firmly believers that it's your bitcoin,
it's your digital assets, and we want to do everything
we can to make sure it stays that way. And

(05:14):
so one of the natural evolutions from sort of stabilization was, well,
how else can we protect people in market volatility and
from a downside risk perspective, And that's where salt shield
comes from. And essentially what happens when people enroll in
salt Shield, it's a fee based program that they can
enroll into. They don't have any liquidation call, any liquidation risk.

(05:39):
So essentially what happens is the company is then lending
bitcoin or assets to meet the meat sort of the
final march and call which would have caused liquidation. They
still get march and call notices, they still get alerts
with sort of the system, but it really takes that
sort of disastrous result or implication and out of the

(06:01):
equation for people when they're enrolled.

Speaker 1 (06:03):
How far down that rabbit hole do you go? Give
me an example. Is there a limit in which you
guys will backstop that to avoid the you know, the
potential liquidation.

Speaker 3 (06:17):
So we are building reserves, and we have other investment
accounts and investors that build up a reserve to be
able to meet the need. The way the product is
structured today is that the protection is for till the
maturity data the loan, and once the maturity the data
the loan happens, we do then look to reset the

(06:40):
assets that are in the account and re re establish
the loan within sort of certain criteria.

Speaker 2 (06:46):
Gotcha, all right?

Speaker 1 (06:47):
Talk to me a little about how you guys are
different than some of the traditional ones out there. An
example that I'll give you.

Speaker 2 (06:53):
Is Morpho Morpho.

Speaker 1 (06:55):
Of course, the one thing I don't like about it
is when you're taking a loan within Morpho, you're exiting
into USDC and right now Coinbase doesn't allow you to
just re enter the market into it. I just want
to go buy bitcoin again, you know. So how is
that different for you guys. Do you guys care what
I do with the proceeds? Is there any kind of requirements,

(07:16):
any kind of hoops I have to jump through?

Speaker 3 (07:18):
No, we allow people to get the cash in either USD,
USDC or USDT in terms of how you get your
loan proceeds today, and we have no requirements on what
the use of those proceeds are applied to. What we
typically see is three predominant use cases. So a lot

(07:38):
of our customers will use the proceeds just to live life,
to pay for things that occur in their life, whether
the it's a trip, whether it's an emergency expense. We
have had a customer use the funds to adopt a child,
and so it really is just, hey, I've accumulated all
this value, how do I tap into it? From an

(07:59):
individual side, and then from a business side, we see
people using it as a corporate reserve to smooth out
cash flows and to invest in additional or capital assets
to help grow their business. The other two use cases
that are becoming more prominent. One is around income replacement,

(08:20):
So we're seeing people borrow against their bitcoin to effectively
retire on bitcoin or supplement their income. So they can
decrease the amount that they're working. And then the third
use set of use cases is really for further investment
and growth opportunities, where people are now understanding I can
borrow against my bitcoin in sort of a tax efficient way.

(08:42):
I can then choose to use those proceeds to maybe
go invest in other dividend producing assets or a diversification
of assets so that I can have a more complete portfolio.

Speaker 1 (08:54):
So you guys, of course, I'm looking now at your site.
This is on the business tab right here, so powering
your business, and there was quite a few options here
in terms of what you can do with it. And
I think this is kind of the interesting thing for
me because you know, we have this is something we
do here in South Florida. We have a kind of
a seminar that we do for local businesses and I

(09:16):
introduced this the last time I was doing the seminar,
and it blew their minds that you could actually do
this with a business setup. So is there anything special
that they have to do? If a business says, hey,
I own ten bitcoin, I want to come in and
loan against it, what's the process? Is it as easy
as it is on the personal side it is.

Speaker 3 (09:38):
They have to just go through the KYC process for
a business to set up a business account, but they'll
transfer the collateral to Assault account, to Assault wallet and
then they can borrow against it as you would as
an individual. And you know, what we're seeing is a
lot of interest, especially from small and medium sized businesses,

(09:58):
about how they can really daily cost average their way
into bitcoin and other digital assets as a way of
financial stability and financial flexibility. Like a lot of the
treasury management companies are catching the limeline in terms of
the metaplanets and the strategy bs of the world, But
I think that there is a real great lever for

(10:20):
small and medium sized businesses to think about really putting
a lot of capital flexibility into their businesses through investing
and purchasing of bitcoin and other digital assets so that
they don't have to rely on regional banks and going
through loan application processes.

Speaker 1 (10:38):
Yeah, Hunter, well that's a good point, because I think
this is something that businesses are now starting to realize.
Do you think we are at that phase now with
obviously the Genius Act coming into play, most likely we're
going to get market clarity this year as well. Do
you think businesses are finally at the stage where they're
going to start putting more bitcoin and other digital assets

(10:58):
on their treasury.

Speaker 3 (11:00):
I think so. I mean, one of the things that
excites me the most about bitcoin in particular is I
believe that bitcoin and the tools being built around it
is really democratizing wealth creation. And that's like and what
I mean by that, it's taking a lot of the
strategies and tactics that the ultra wealthy have used and
their businesses that they have owned, and making it available

(11:23):
to anybody above a certain amount. So we have minimum
loan size of ten to that ten five to ten
thousand dollars depending on the jurisdiction, especially in the United States,
and so it's not a huge hurdle to get over
and then you're able to build up that sort of
financial reserve to accomplish your objectives, whatever they may be.

(11:46):
And so whether that is just to make a purchase,
whether it's to do an income supplement or make an
additional investment. I think that capability for both, as we
were touched on earlier, right for people that are finding
those options maybe fewer and far between from a traditional
perspective as well as from a business perspective. I think
we'll create more Hopefully we'll create more resiliency and flexibility

(12:10):
as people start to understand the asset class.

Speaker 1 (12:13):
What has been the experience you guys have had with
the way that because I'm sure everybody wants to do
it differently, But how do you maintenance alone? Let's just
we'll just use a round number. It's one hundred K bitcoin.
You know, I go take a loan on that. My
TVL let's say, is around sixty percent. I know you
guys up and go up to seventy. But if I
go in at a sixty percent, so that's a sixty

(12:35):
K loan, how do I maintenance that loan over time?

Speaker 3 (12:39):
So we have a couple different options in terms of
how the loans can get structured. We have a we
have a finance interest product where the interest payments can
be bundled into into the loan and so.

Speaker 2 (12:51):
You've based to accelerate the value.

Speaker 3 (12:54):
And the bitcoin stays well, it's for a fixed period, right,
So if you have one hundred if you have a
sixty thousand dollars loan, and let's say it's at ten percent,
you'd be six thousand dollars worth of interest that would
be bundled into the principal amount, but it basically gives
you flexibility. You don't have to make any monthly payments
at that point and you just have to meet the
margin calls a. We have an interest only option where

(13:17):
you just pay your interest payments monthly, and then we
have an option for principal and interest, and some of
those choices are jurisdictionally driven as well, like certain jurisdictions
mandate one or the other or exclude one or the
other in terms of a customer's choice, But that's sort
of the standard loan structure. And then for there the

(13:39):
customer really gets put in control in terms of what
is the LTV that you want to how much do
you want to sort of borrow against the value r
bitcoin And we go up to as you were mentioned,
we go up to seventy percent loan to value ratio.
But we have a lot of customers that stay down
in the twenty percent thirty percent LTV range because that

(14:00):
fits their risk profile. And so some of the education
that we do when customers on board is help them
understand how LTV can be used as a tool to
manage their risk and how much they need to be
staying on top of sort of the margin call process,
and that changes for people depending on how much cash

(14:22):
reserves or other assets they may be able to bring
to bear if needed.

Speaker 1 (14:27):
So, okay, well let's talk about that because we have
a lot of audience that owns bitcoins, they have some ethereum,
they have XRP, they might have Salona, whatever it might be.
Is there any plan in the future with salt to
be able to incorporate other digital assets?

Speaker 3 (14:43):
So we do. So we have we allow people to
have a portfolio of assets as collateral against a single loan.
So you can have a theorum, you can have bitcoin,
you can have stable coin and borrow against it. In fact,
we have a lot of people that add stable coin
into their collatter mix to help take out some of
the volatility of bitcoin. Say, for example, interesting, okay, so

(15:07):
you could you could have one hundred thousand dollars worth
of bitcoin plus thirty thousand dollars worth a stable coin
in your collateral wallet to be able to then borrow
against one hundred and thirty thousand dollars worth of collateral value.
But the effective, the effective, the impact of that is
that takes out some of the volatility of bitcoin.

Speaker 2 (15:29):
Yeah, for sure.

Speaker 1 (15:30):
Well, and I think you know, as we see markets dip,
this is typically where you see smart investors go, wait
a minute, I'm going to go in and buy this.
Dip utilizes that the as the market starts to accelerate,
up pocketed into a loan, you know, utility, and then
lend against that in the future and arbitrage into the market.
So it's definitely a simple way to go that route.

(15:52):
My question is when you look at the amount of
opportunity that is here and someone parking Let's just use
big coin as the example.

Speaker 2 (16:01):
We'll go back to ten bitcoin.

Speaker 1 (16:03):
I know that's a lot of guys, but you know,
just in general, you can put that down into one
whatever you want to kind of base that, and you've
got to let's say you only go a thirty LTV
thirty percent is all I'm loaning against one hundred that
we'll just use one hundred thousand bitcoin. What happens to
the rest of that asset class that's there? Can I
use that for something else down the road?

Speaker 2 (16:27):
Is it going to be.

Speaker 1 (16:27):
Parked in there all the time waiting for me to
lend or pay out of it? What's the mechanism that
I can do within the Salt platform to kind of
manage that.

Speaker 3 (16:36):
So within the Salt platform, it's in when it's against
the loan, it is in your collateral count against the loan,
and it is there sort of backing up the loan.
Now you could refinance your loan and take additional cash out.
We have a lot of customers that look at it
almost treat sort of that that untapped sort of cash potential.

Speaker 2 (16:56):
As a line of credit, line of credit.

Speaker 3 (16:58):
So will they will cust essentially custody their bitcoin with
us and borrow against what they need, but then continue
to draw down on it as they have other needs
as they go forward. We also have a product called
lend where if you wanted to move some if you're
an accredit investor, you can move some of that ten

(17:19):
bitcoin that you don't need against your loan into a
lend account and earn a yield on the bitcoin.

Speaker 1 (17:27):
Okay, all right, so that's is that available right now?
That's I'm looking at your website. Is that available or
is that done with private clients? How's that done?

Speaker 3 (17:38):
Is done with private? You have to be an accredited
investor to be able to use that product, but it
is available on the platform.

Speaker 2 (17:44):
Okay. Interesting?

Speaker 1 (17:45):
So okay, So I know you guys are crafting a
book right now that is talking about kind of this
next evolution of finance, and we're really you know, we
kind of touched on it there for a minute in
the sense of people looking at digital assets is really
kind of new, you know, American dream or global dream.

Speaker 2 (18:03):
Now, what are you.

Speaker 1 (18:04):
Guys finding in your discovery of getting this book out
that's making you even more bullish on where this market
is going?

Speaker 3 (18:13):
Well, I'm you know, really excited. I just got back
from speaking at Bitcoin Asia, which was in Hong Kong
last week, and I mean there were over twenty thousand
people that came to the show. Wow, and it was
it was just fantastic to see the level of interest
in sort of the Asia Pacific region. I was able
to have conversations with people from Singapore, from Hong Kong,

(18:35):
from mainland China, from Malaysia, in Vietnam, and just a
range of countries in the interest level of how how
can I use bitcoin to build wealth? A lot of
the you know, a lot of the individuals I spoke with,
they don't have a lot of confidence in their national
stock markets. As we talked to, you know, the the

(18:57):
hurdle to buying a house in some of those countries
is even more or even higher than what it is
in the United States. I think the average age of
first time home ownership in Hong Kong, for example, is
forty wow. So you know, there's a lot of wealth
that is looking to say, well, where can I put
it to have sort of flexibility with it, to have

(19:19):
sort of appreciation opportunities. And the other element is like
where it's protected. You know, Sean and I, as we've
been thinking about the bitcoin and sort of what is
the bitcoin advantage, There's been three words that have really
come to mind. One is, you know, one is sort
of protect right, So how do people protect their assets

(19:39):
in terms of, you know, being able to buy into
it when they want to buy into it, not having
it taken away, being able to send it where they
want to send it. The second one is preserved. They
want to preserve the value, so they want to have
an asset class and an investment opportunity that fights inflation.
And then the third one is prosper and people want

(20:00):
to be able to build up the wealth and borrow
against it as they do with home equity lines of
credit and not have to sell and give up the
future upside. And you know, as we talked about, I
think bitcoin as an asset class, especially with more and
more countries and larger corporates coming into the ecosystem, is
helping one raise the awareness but also raise the stability

(20:23):
and the value of the asset class as a whole.

Speaker 1 (20:26):
Yeah, I think we are going to see an evolution
in this. We're obviously leaning against you, you know, your assets.
It's not new. This is something that's been around for ages.
It's how the wealthy accrue wealth. And if you're going
into asset classes that are doing what we're seeing right
now in digital assets, and that is going up, and
especially as you look at dollar debasement. You know, we

(20:48):
just saw the FED numbers continue to see job decline.
Credit is at an all time high. These are issues
that are really going to start what I think is
going to be a problem with hyperinflation, which is only
going to push these digital assets higher. So I think
if anybody's looking at it, now is the time to
kind of go into that hunter. It's been good having
you on. If you guys want to learn a little
bit more about what salt is doing. Just go over

(21:09):
salt lending dot com. We'll leave a link down in
the description and you guys can start your journey over there.
And good going, but thanks for coming in. We appreciate it.

Speaker 3 (21:18):
Yeah, Paul, it's been a pleasure and one thing to
add if people want to go learn more, they can
go to salt Lending dot com, forward slash PBN. We
have additional resources there about how to live a bitcoin
powered life and special offers for listeners of your show.

Speaker 2 (21:35):
Perfect. Let me just see if I can bring that
up real quick. I didn't know you had got there
it is? How about that?

Speaker 1 (21:39):
Okay, you've got our Well, there you go, guys. We'll
leave this link down in the link below so you
guys can jump in right there and of course unlock
some special offers there from salt Lending.

Speaker 2 (21:51):
But we appreciate it. Hey, Hunter, is good seeing you.

Speaker 1 (21:53):
I'm going to get you back on because I have
some deeper questions on strategies around bitcoin lending in general,
because there's so many ways you can do this, and
I want to get you guys' opinion on that.

Speaker 3 (22:04):
Okay, now we'd look forward to it, all right.

Speaker 2 (22:07):
Man, thanks a lot, appreciate it all right, now are
you guys? Are you guys?

Speaker 1 (22:11):
If you are not in the Diamond circle, this is
the place to be. It is our own private member group.
It's absolutely free to join. And the cool thing there
is you get our Baron Market Edge email. It is
my personal email out to you guys. We do a
lot of analysis on the market. It's a lot of research,
some of our own data around the tools that we
use to track some of these assets. So I have

(22:32):
to hit the link down below and of course follow
me out there on x at Paul Baron. We'll catch
you next time right here on the Paul Baron Show.