Forgive the clickbait title. %$#& just got real though.
I started researching Salt Lending, a crypto lending platform and cryptocurrency. Basically Salt works like this:
SALT is a crypto, an ERC20 token. It's in the top 100 in marketcap.
You give BTC/ETH/BCH as collateral (let's use BTC only here for simplicity). The loan is then 80% or less of the market value of the BTC. BTC remains "yours" - if it goes up, you can use the profits (withdraw or borrow more). If it goes down, you have to put more in so that the loan is not more than 80% of the BTC value.
You pay the loan off like a normal loan, with moderately well-priced interest. If you miss, they liquidate part of the BTC. If you don't pay at all, you get liquidated completely.
One advantage is that you don't have to pay capital gains on the BTC because it's still yours. This makes Salt Lending appealing if you want to spend your BTC but don't want to pay Capital Gains. You still pay the interest though.
Now, where does the ERC20 token, SALT, come in?
You need to pay to get a membership. Also you can use it to lower interest rates.
And to pay back the loan.
Now strap in because I'm about to blow your mind.
Salt is trading at about $3.00 right now. But you can also buy Salt directly for $27.50. This is a set price they keep, generated by some kind of algorithm.
And you can also pay back your loans with Salt - and it will be valued at $27.50 when you do.
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Think about it for a second.
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It's called arbitrage. Is this a ponzi scheme? Is this too good to be true? One thing to note is that you can't pay it back all at once. Still...I'm still reeling. Thoughts????