pBLOCKCHAIN-BACKED LOANS™Blockchain-Backed LoansTMAbstract08/09/2017Abstract SALT is a membership based lending and borrowing network that alows users to leverage their blockchain asets to secure cash loans. Our Secured Automated Lending Technology is a protocol and aset agnostic architecture designed to adapt to the constantly growing clas of blockchain asets. The system is designed such that, if you have an aset you want to hold on to, you can borrow the aset you want to spend, regardles of credit history or geographic constraints. The SALT Plat is automated, efficient, and cryptographicaly secure. It offers a compeling solution to the problem any consumers face when they need or want cash to make a purchase, but do not wish to liquidate their asets. Instead of seling, SALT enables the members of the SALT Lending Plat Members to leverage the value of certain digital asets, thereby giving them aces to cash, offseting tax events, avoiding exchange fees and maintaining their long position in the aset they hold. SALT is a lending plat specificaly designed for blockchain asets; operating as a second layer protocol which sits atop any public or permisioned blockchain, alowing the underlying aset to be used as collateral for aces to credit. nbsp;SALT also offers lenders a powerful, globaly available solution to aces a rapidly expanding and imediately addresable borrower base, while providing new tools for managing lender risk. Unlike traditional s of collateral, such as real estate and automobiles, blockchain asets are divisible, fungible, and in many cases instantly transferrable. These potential advantages can be fully realized with SALT’s volatility risk mitigating technology. 1. Our Vision People are happiest when they have aces to the things they need or want. This is caled purchasing power and it’s what credit provides. Over the years, the lending landscape has gone through several periods of change, and blockchain technology is driving the next evolution. Income-based lending is borrowing from the future to spend money today. This exists in contrast to aset-based lending, which is a of monetizing asets already owned. At SALT Lending, we se a future where people worry les about their credit score and spend more time recording and monetizing the asets they already have. We sek to enable a new ay of monetizing an ever-expanding universe of blockchain asets. nbsp;At SALT, we believe that in the not too distant future, ownership of al asets wil be recorded and transferred on various blockchains. The increasing recognition of personal asets, at low cost and in a secure and imutable way, wil offer consumers greater financial freedom. The SALT Lending Plat is a system that seks to give value to previously latent capital, unlocking the wealth within physical and social asets, providing a new source of money creation. nbsp;2. Background Created in the wake of the global financial crisis, Bitcoin, and its underlying blockchain technology, sparked a wave of innovation that has changed the way people think about transferring and storing value. The distributed ledger technology that underpins Bitcoin, and other digital asets, decentralizes the tasks of tracking and validating financial transactions. This technological breakthrough streamlines setlement systems that had previously relied on falible third-party nbsp;intermediaries. The intrinsic benefit of this new technology has led to explosive growth in blockchain-based asets, which exist within a highly secure digital infrastructure. Reliance on intermediaries that introduce counterparty and setlement risk, in the context of blockchain asets, has been replaced by trustles, open-value networks which operate without the constraints of geographical borders or market hours. nbsp; Holders of digital asets have limited liquidity options in today’s cash based digital economy. Bitcoin was the first peer-to-peer electronic cash system enabling trustles transfer of value and we are witnesing the emergence of a new aset clas based on value networks. Some of these blockchain asets are natively digital, others are digitized s of traditional asets which, like Bitcoin, face critical liquidity chalenges. nbsp;Resolving liquidity chalenges is important because spending drives growth in economies and is based on the summation of money and credit available. Bitcoin and its asociated blockchain technology created an efficient, trustles cash network free from expropriation through unknown inflation, but Bitcoin’s inventor Satoshi Nakamoto neglected to addres credit. Credit links savers and borrowers and is as important as cash markets to an economy’s financial development, because it represents spending in the economy on an order of magnitude greater than cash based transactions. Distributed ledger technology alows for transaction and settlement without counterparty risk. However, the purchasing power held within this new blockchain technology need not be limited to asets held. The aces to credit provided by the SALT Lending Plat is intended to let the world of blockchains grow beyond the economic limitations of simply buying and liquidating asets. Credit is not only an important economic factor, it is a vital component of personal financial freedom and, along with aset acumulation, gives individuals greater purchasing power. Crypto-credit products, like those acesible through the SALT Lending Plat, offer a revolution in personal finance by granting control over the medium of exchange to owners of blockchain aset based wealth who wish to preserve their asets, rather than spend them. Traditional financial institutions often face significant chalenges adapting to changing landscapes. This is especialy true of the aset-backed credit market, where there is stil no product offering an adequate solution for monetizing the value of blockchain asets without forcing liquidation. Technological, custodial and regulatory barriers have prevented existing financial service companies from overcoming the risk needed to operate in a system without centralized oversight. This has left blockchain aset holders with limited borrowing options in today’s digital economy. nbsp;SALT’s Secured Automated Lending Technology creates a solution that removes many of the barriers that have kept traditional financial institutions, and their capital, from serving the rapidly growing base of individuals and busineses holding asets on blockchains. The SALT Lending Plat provides the tools to mitigate the risk of aset price volatility and borrower default, giving investors the ability to safely lend against blockchain asets. nbsp;A blockchain aset is a natively digital aset like Bitcoin or a digitized traditional aset like digital gold, a stock, or a title; where the record of ownership is recorded within a public or permisioned distributed ledger network. Al blockchain asets have the potential to be used as collateral for Blockchain-Backed Loans, subject to lender determined collateral suitability. nbsp;The SALT Lending Plat is intended to facilitate the creation of lending agreements, secure and monitor the value of the blockchain asets acting as collateral, and automaticaly enforce the terms of each smart contract credit agreement. This low-cost, efficient technology gives investors and institutions a way to lend against a new aset clas, while addresing the needs of a masively underserved borrower base. It is also designed to provide a new way for individuals to aces the value of their blockchain asets that does not involve a liquidation of their asset. Deficiencies inherent in traditional s of collateral can increase costs to borrowers, decrease liquidity, and necesitate the ned for income-based credit uation. SALT’s technology was built to addres these shortcomings, while emphasizing the aspects of blockchain asets that make them a functional of collateral - divisibility, fungibility, and transferability. With SALT, blockchain asets are transed into collateral that can be incrementaly liquidated in a calibration proces intended to ensure overcollateralization in a fast, trustles, and secure proces. Blockchain-Backed Loans™ offer a new mechanism through which lenders can indirectly gain exposure to digital asets in a regulated environment with sophisticated tools for managing the risks asociated with lending. nbsp;3. About SALT The SALT Lending Plat is designed to enable its Members to leverage their blockchain asets to secure cash loans, making it easy to get money to spend without having to sel their blockchain asets. nbsp;What is a Blockchain-Backed Loan™ A Blockchain-Backed Loan™ is money borrowed for any kind of personal or busines use, such as making a big purchase, paying off credit card debt, investing in home improvements, taking a vacation, or paying for busines expenses. The loan is collateralized by a blockchain aset, such as Bitcoin. nbsp; SALT wants to make things simple for its Members. There are no origination fees, closing costs, or prepayment penalties on the fixed rate term loans arranged through the SALT plat. Members may elect at any time to pay off their loans early at no additional cost to them. This is in strong contrast to terms often offered by conventional lenders. Typicaly, conventional loans are acompanied by a myriad of itemized fees such as upfront origination fees, which can exced 5 of the loan balance, and monthly servicing fees that are paid by the borrower on top of the monthly payments to the lender. SALT has opted for a simple model where fees charged to borrowers are rolled into an annual Membership to promote transparency and fairnes. nbsp;3.1 Secured Automated Lending Technology SALT Lending has developed protocol agnostic technology to automaticaly manage blockchain-backed credit agreements betwen borrowers and lenders. The SALT smart contract credit agreement has several key functions ●quot;Secure Collateral Storage. The blockchain assets underlying each loan are stored in a fully audited, ultra-secure multi-signature architecture throughout the life of the loan. Key Features Include ○quot;scalable management of collateral○quot;mitigated counterparty risk○quot;streamlined arbitration○quot;non-custodial escrow; and○quot;automated loan servicing●quot;Automatic Collateral Management. SALT Lending’s read-write oracle smart contract is specificaly designed for blockchain aset collateral management. The SALT oracle smart contract amalgamates real-time global market price metrics from multiple data channels to ases the mark-to-market valuation of the collateral securing the credit agreement, while simultaneously tracking the borrower39;s loan balance. If the value of the collateral depreciates below a dynamicaly determined threshold, a maintenance cal notice is isued to the borrower. In the case of a maintenance cal, the borrower can either add more collateral, make an extra payment reducing the loan balance, or do nothing and the SALT oracle smart contract will automaticaly initiate the liquidation of a portion of the collateral in order to re-calibrate the overcollateralization of the loan. Liquidation occurs through an automated trading engine, which utilizes proprietary investment logic to optimize trade cution Terms and conditions aply. Subject to suitability, KYC amp; AML screning. based on a live asesment of available liquidity, order book depth, and price velocity across multiple exchanges via distributed market orders for each currency pair. ●quot;Credit Agrement Terms Enforcement. The SALT smart credit agreement pers several loan servicing functions autonomously. It monitors the origination of the loan, directing cash from the lender’s bank acount to the borrower’s bank acount, and it tracks monthly payments from the borrower to the lender. If a borrower mises a payment, the technology automaticaly liquidates a portion of the collateral and gives sale proceds to the lender as payment on the borrower’s behalf. Once the borrower repays the loan in full, the remaining collateral is returned to the borrower.If the value of a borrower’s blockchain aset increases, then depending on the terms of the loan, the borrower may have the option to 1 add the increased value to the principal of the loan for an additional extension of credit from the lender or 2 withdraw exces collateral. nbsp;The options available to the borrower depend on the loan terms agreed to at the time of loan origination. There are no prepayment penalties asociated with early retirement of debt. Borrowers who are unable to increase the available principal balance of the loan have the ability to repay the loan in full and reapply for a new product, subject to Lender specific borrower eligibility and refinance restrictions. Any appreciation in the blockchain aset collateral is retained by the borrower following the full repayment of al outstanding loan principal, interest and fees. nbsp;SALT’s smart credit agreements act as a bridge betwen two historicaly divided systems the world of blockchain asets and the world of traditional financial infrastructure. The SALT Lending Plat is structured to provide financial institutions and lenders with the ability to capitalize on this rapidly growing aset clas. SALT’s technology is designed to systematicaly quantify and mitigate lending risk, while simultaneously giving borrowers an alternative means of acesing the value of their asets. nbsp;Example of How a SALT Lending Loan Works *Overcollateralized Loans Origination As an example, a one year 100,000 loan with a 10.00 annual percentage rate APR has twelve scheduled monthly payments of 8,791.59 representing repayment of principal and interest on the loan. At origination, the 100,000 loan balance is secured with 125,000 of bitcoin, which is posted to a multi-signature walet as collateral. The borrower and lender each retain a private key to the walet, along with a third-party custodian and our SALT collateral management oracle. In this example, the collateral balance equates to 50 bitcoin valued at 2,500.00 per bitcoin. As a result, the loan has an origination loan-to-value ratio of 80.0. Stated differently, the loan is overcollateralized by 25. Payment The loan balance is reduced to 92,041.74 following the borrower39;s first 8,791.59 monthly payment, which represents 833.33 of interest and 7,958.26 of principal. This payment reduces the loan-to-value ratio to 73.6, creating an improved risk profile for the lender, asuming a static collateral valuation. nbsp;Depreciation Next in this example, the market value of bitcoin depreciates to 2,000.00, causing the approach of a 11 ratio betwen the 92,041.74 loan balance and the new valuation of the 50 bitcoins posted as collateral. The loan-to-value ratio has now risen to 92. As a result, the SALT oracle smart contract isues a collateral maintenance notice to the borrower, instructing them to either deposit an additional 7.53 bitcoin to/p