SALT Whitepaper

Sunday, June 3, 2018
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Blockchain-Backed LoansTM Abstract 08/09/2017

Abstract This exists in contrast to asset-based lending, which is a form of monetizing assets already owned. At SALT is a membership based lending and borrowing SALT Lending, we see a future where people worry network that allows users to leverage their less about their credit score and spend more time blockchain assets to secure cash loans. Our Secured recording and monetizing the assets they already Automated Lending Technology is a protocol and have. We seek to enable a new way of monetizing an asset agnostic architecture designed to adapt to the ever-expanding universe of blockchain assets. constantly growing class of blockchain assets. The system is designed such that, if you have an asset you At SALT, we believe that in the not too distant want to hold on to, you can borrow the asset you want future, ownership of all assets will be recorded and to spend, regardless of credit history or geographic transferred on various blockchains. The increasing constraints. The SALT Platform is automated, recognition of personal assets, at low cost and in a efficient, and cryptographically secure. It offers a secure and immutable way, will offer consumers compelling solution to the problem many consumers greater financial freedom. The SALT Lending face when they need or want cash to make a Platform is a system that seeks to give value to purchase, but do not wish to liquidate their assets. previously latent capital, unlocking the wealth within Instead of selling, SALT enables the members of the physical and social assets, providing a new source of SALT Lending Platform (Members) to leverage the money creation. value of certain digital assets, thereby giving them ! access to cash, offsetting tax events, avoiding 2. Background exchange fees and maintaining their long position in the asset they hold. SALT is a lending platform Created in the wake of the global financial crisis, specifically designed for blockchain assets; Bitcoin, and its underlying blockchain technology, operating as a second layer protocol which sits atop sparked a wave of innovation that has changed the any public or permissioned blockchain, allowing the way people think about transferring and storing underlying asset to be used as collateral for access to value. The distributed ledger technology that credit. underpins Bitcoin, and other digital assets, decentralizes the tasks of tracking and validating SALT also offers lenders a powerful, globally financial transactions. This technological available solution to access a rapidly expanding and breakthrough streamlines settlement systems that immediately addressable borrower base, while had previously relied on fallible third-party providing new tools for managing lender risk. Unlike intermediaries. The intrinsic benefit of this new traditional forms of collateral, such as real estate and technology has led to explosive growth in automobiles, blockchain assets are divisible, blockchain-based assets, which exist within a highly fungible, and in many cases instantly transferrable. secure digital infrastructure. Reliance on These potential advantages can be fully realized with intermediaries that introduce counterparty and SALT’s volatility risk mitigating technology. settlement risk, in the context of blockchain assets, has been replaced by trustless, open-value networks 1. Our Vision which operate without the constraints of geographical borders or market hours. People are happiest when they have access to the things they need or want. This is called purchasing Holders of digital assets have limited liquidity power and it’s what credit provides. Over the years, options in today’s cash based digital economy. the lending landscape has gone through several Bitcoin was the first peer-to-peer electronic cash periods of change, and blockchain technology is system enabling trustless transfer of value and we are driving the next evolution. Income-based lending is witnessing the emergence of a new asset class based borrowing from the future to spend money today. on value networks. Some of these blockchain assets

are natively digital, others are digitized forms of SALT’s Secured Automated Lending Technology traditional assets which, like Bitcoin, face critical creates a solution that removes many of the barriers liquidity challenges. that have kept traditional financial institutions, and their capital, from serving the rapidly growing base Resolving liquidity challenges is important because of individuals and businesses holding assets on spending drives growth in economies and is based on blockchains. The SALT Lending Platform provides the summation of money and credit available. the tools to mitigate the risk of asset price volatility Bitcoin and its associated blockchain technology and borrower default, giving investors the ability to created an efficient, trustless cash network free from safely lend against blockchain assets. expropriation through unknown inflation, but Bitcoin’s inventor Satoshi Nakamoto neglected to A blockchain asset is a natively digital asset like address credit. Credit links savers and borrowers and Bitcoin or a digitized traditional asset like digital is as important as cash markets to an economy’s gold, a stock, or a title; where the record of financial development, because it represents ownership is recorded within a public or spending in the economy on an order of magnitude permissioned distributed ledger network. All greater than cash based transactions. Distributed blockchain assets have the potential to be used as ledger technology allows for transaction and collateral for Blockchain-Backed Loans!, subject to settlement without counterparty risk. However, the lender determined collateral suitability. purchasing power held within this new blockchain technology need not be limited to assets held. The The SALT Lending Platform is intended to facilitate access to credit provided by the SALT Lending the creation of lending agreements, secure and Platform is intended to let the world of blockchains monitor the value of the blockchain assets acting as grow beyond the economic limitations of simply collateral, and automatically enforce the terms of buying and liquidating assets. Credit is not only an each smart contract credit agreement. This low-cost, important economic factor, it is a vital component of efficient technology gives investors and institutions personal financial freedom and, along with asset a way to lend against a new asset class, while accumulation, gives individuals greater purchasing addressing the needs of a massively underserved power. Crypto-credit products, like those accessible borrower base. It is also designed to provide a new through the SALT Lending Platform, offer a way for individuals to access the value of their revolution in personal finance by granting control blockchain assets that does not involve a liquidation over the medium of exchange to owners of of their asset. Deficiencies inherent in traditional blockchain asset based wealth who wish to preserve forms of collateral can increase costs to borrowers, their assets, rather than spend them. decrease liquidity, and necessitate the need for income-based credit evaluation. SALT’s technology Traditional financial institutions often face was built to address these shortcomings, while significant challenges adapting to changing emphasizing the aspects of blockchain assets that landscapes. This is especially true of the asset- make them a functional form of collateral - backed credit market, where there is still no product divisibility, fungibility, and transferability. With offering an adequate solution for monetizing the SALT, blockchain assets are transformed into value of blockchain assets without forcing collateral that can be incrementally liquidated in a liquidation. Technological, custodial and regulatory calibration process intended to ensure barriers have prevented existing financial service overcollateralization in a fast, trustless, and secure companies from overcoming the risk needed to process. Blockchain-Backed Loans™ offer a new operate in a system without centralized oversight. mechanism through which lenders can indirectly This has left blockchain asset holders with limited gain exposure to digital assets in a regulated borrowing options in today’s digital economy. environment with sophisticated tools for managing the risks associated with lending.

3. About SALT lenders. The SALT smart contract credit agreement has several key functions: The SALT Lending Platform is designed to enable ●" Secure Collateral Storage. The blockchain its Members to leverage their blockchain assets to assets underlying each loan are stored in a secure cash loans, making it easy to get money to fully audited, ultra-secure multi-signature spend without having to sell their blockchain assets. architecture throughout the life of the loan. ! What is a Blockchain-Backed Loan™? Key Features Include: ○" scalable management of collateral! A Blockchain-Backed Loan™ is money borrowed ○" mitigated counterparty risk! for any kind of personal or business use, such as ○" streamlined arbitration! making a big purchase, paying off credit card debt, ○" non-custodial escrow; and! investing in home improvements, taking a vacation, ○" automated loan servicing! or paying for business expenses. The loan is ! collateralized by a blockchain asset, such as Bitcoin. ●" Automatic Collateral Management. SALT SALT wants to make things simple for its Members. Lending’s read-write oracle smart contract is There are no origination fees, closing costs, or specifically designed for blockchain asset prepayment penalties on the fixed rate term loans collateral management. The SALT oracle arranged through the SALT platform. Members may smart contract amalgamates real-time global elect at any time to pay off their loans early at no market price metrics from multiple data additional cost to them. This is in strong contrast to channels to assess the mark-to-market terms often offered by conventional lenders. valuation of the collateral securing the credit Typically, conventional loans are accompanied by a agreement, while simultaneously tracking the myriad of itemized fees such as upfront origination borrower's loan balance. If the value of the fees, which can exceed 5% of the loan balance, and collateral depreciates below a dynamically monthly servicing fees that are paid by the borrower determined threshold, a maintenance call on top of the monthly payments to the lender. SALT notice is issued to the borrower. In the case of has opted for a simple model where fees charged to a maintenance call, the borrower can either borrowers are rolled into an annual Membership to add more collateral, make an extra payment promote transparency and fairness. reducing the loan balance, or do nothing and the SALT oracle smart contract will automatically initiate the liquidation of a portion of the collateral in order to re- 3.1 Secured Automated Lending Technology calibrate the overcollateralization of the loan. SALT Lending has developed protocol agnostic Liquidation occurs through an automated trading engine, which utilizes proprietary technology to automatically manage blockchain- backed credit agreements between borrowers and investment logic to optimize trade execution Terms and conditions apply. Subject to suitability, KYC & AML screening.

based on a live assessment of available SALT’s smart credit agreements act as a bridge liquidity, order book depth, and price between two historically divided systems: the world velocity across multiple exchanges via of blockchain assets and the world of traditional distributed market orders for each currency financial infrastructure. The SALT Lending Platform pair. ! is structured to provide financial institutions and ! lenders with the ability to capitalize on this rapidly ●" Credit Agreement Terms Enforcement. growing asset class. SALT’s technology is designed The SALT smart credit agreement performs to systematically quantify and mitigate lending risk, several loan servicing functions while simultaneously giving borrowers an alternative autonomously. It monitors the origination of means of accessing the value of their assets. the loan, directing cash from the lender’s bank account to the borrower’s bank account, and it tracks monthly payments from the borrower to the lender. If a borrower misses a payment, the technology automatically liquidates a portion of the collateral and gives sale proceeds 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 asset 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 excess collateral. The options available to the borrower depend on the loan terms agreed to at the time of loan origination. There are no prepayment penalties associated 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 asset collateral is retained by the borrower following the full repayment of all outstanding loan principal, interest and fees. ! ! ! ! ! ! ! !

Example of How a SALT Lending Loan Works * Overcollateralized Loans Origination: As an example, a one year $100,000 risen to 92%. As a result, the SALT oracle smart loan with a 10.00% annual percentage rate (APR) has contract issues a collateral maintenance notice to the twelve scheduled monthly payments of $8,791.59 borrower, instructing them to either deposit an representing repayment of principal and interest on additional 7.53 bitcoin to the collateral wallet or the loan. At origination, the $100,000 loan balance is make a loan prepayment of $12,041.74. Either option secured with $125,000 of bitcoin, which is posted to would result in the loan returning to an 80% loan-to- a multi-signature wallet as collateral. The borrower value ratio. The SALT oracle takes reasonable and lender each retain a private key to the wallet, measures to notify the borrower of the notice, via along with a third-party custodian and our SALT email and SMS communications which include an collateral management oracle. In this example, the estimated time allotment to meet the maintenance collateral balance equates to 50 bitcoin valued at call. The actual time period allotted to a borrower to $2,500.00 per bitcoin. As a result, the loan has an meet a call is subject to the velocity of the price origination loan-to-value ratio of 80.0%. Stated decline, and there is no guarantee to the accuracy of differently, the loan is overcollateralized by 25%. the time estimate. Payment: The loan balance is reduced to $92,041.74 Default: If the borrower is unable to act, or chooses following the borrower's first $8,791.59 monthly not to meet the maintenance notice, then the SALT payment, which represents $833.33 of interest and oracle initiates a partial liquidation transaction along $7,958.26 of principal. This payment reduces the with the lender and custodian, resulting in the sale of loan-to-value ratio to 73.6%, creating an improved the amount of collateral needed to return the loan-to- risk profile for the lender, assuming a static collateral value ratio to 80%. In this hypothetical example, a valuation. sale order of 30.1 bitcoin would be issued, generating the $60,200.00 needed to reduce the loan balance. Depreciation: Next in this example, the market After the sale, the remaining loan balance of value of bitcoin depreciates to $2,000.00, causing the $31,841.74 would be secured by 19.9 bitcoin at approach of a 1:1 ratio between the $92,041.74 loan $2,000.00 per, totaling to a dollar value of balance and the new valuation of the 50 bitcoins $39,800.00 and resulting in the loan returning to an posted as collateral. The loan-to-value ratio has now 80% loan-to-value ratio. The incremental liquidation *Actual terms, rates, loan-to-value thresholds and available credit are subject to market conditions and suitability, along with KYC & AML screening.

process would next repeat if bitcoin continued to 3.3 SALT Membership depreciate to a $1,739.25 price level. SALT Membership is an Ethereum-based Erc20 3.2 SALT’s Network of Lenders smart contract representing levels of access to the SALT Lending Platform. It can be redeemed for Traditional financial institutions have historically products and services and other rewards offered avoided the world of blockchain assets because of the through the platform. A total fixed supply of challenges faced in adapting to this relatively new 120,000,000 Membership units exist. Demand for technology and asset class. The SALT Lending lending and borrowing on the SALT Platform will Platform provides these institutions with a means to drive the demand for Membership. loan national currencies to holders of blockchain assets without having to change their internal business models or add to their operational costs. While the barriers to adoption have thus far kept 4. How to Purchase Membership these institutions on the sidelines, the interest and demand for access to this disruptive technology has SALT Membership may be purchased with Bitcoin been steadily growing. SALT meets this growing (BTC), Ethereum (ETH) or any cryptocurrency demand by providing the processes, compliance, supported by ShapeShift. SALT Membership is security and technology needed to lend against priced in United States dollars (USD). Purchase of blockchain assets. Membership will be effective only when SALT Lending accepts the application upon multiple SALT’s extensive network of lenders is designed to confirmations of payment. The purchase of SALT give Members access to capital-on-demand. Membership at a discount will end at the earlier of a Qualified Members may select the size, type, and predetermined end date, or the date at which the sale term length of the loan they wish to obtain from the is either closed or terminated by management in its available options listed. Loan applications are then sole discretion. Applicants will be alerted to whether automatically matched with qualified lender capital. they were successful in purchasing a Membership by Lenders benefit from loan interest in an email and an update to their account on the SALT overcollateralized fixed income vehicle that is Lending Platform available at automatically managed by SALT’s technology and denominated in a national currency of their choice. SALT is built to support the lending of any type of The final purchase price is determined when two currency with sufficient demand, inclusive of crypto- confirmations have been recorded on the Bitcoin or currencies. A more complex credit agreement or a Ethereum blockchain. No refunds will be issued for unique collateral type will require more SALT from accepted Membership sales. Membership pricing for the Lender to account for the computational the SALT Lending Platform is based on fixed and development resources required. quantity tiers. Digital currency payments that carry inadequate fees may experience an increase in price Lenders also purchase Membership to the SALT between their initiation of purchase and SALT Lending Platform which gives a Lender access to the Lending’s confirmation. If using a payment network and related services. Financial terms processor that only allows a single unconfirmed reported on the SALT Lending Platform are transaction to remain pending at any given time, determined by qualified Lenders and are subject to multiple purchases may result in delayed each Lender’s specific risk tolerance. As a result, confirmation. SALT Lending will determine the annual percentage rates (APR) and loan-to-value exchange conversion rate for each purchase by (LTV) ratios offered to eligible Members are subject aggregating price feeds from multiple exchanges, to market conditions. All network participants drive adjusting for volume, price variance, statistical additional demand for access by lending or outliers and inactivity. borrowing capital.

If an attempted purchase of Membership is not annual Membership to the SALT Lending Platform. accepted following screening procedures, those Members of the platform accumulate status through funds will be promptly returned. their acquisition and redemption of SALT Memberships above and beyond each minimum SALT Lending has engaged First Bank to hold USD threshold. The cost of Membership replaces most funds. In the event management terminates the sale fees charged to borrowers associated with loan or doesn’t accept a Membership application, any origination and servicing. Elevated annual USD tendered by an applicant will be returned net of Membership status is achieved when additional any outgoing fees charged. memberships are redeemed through the SALT Lending Platform. SALT Membership is available Purchasers of SALT paying in Bitcoin (BTC) or for purchase in any increment depending on Ethereum (ETH) will direct funds, into multi- available inventory. Premier and Enterprise signature cold wallets specifically designed for this Membership packages increase the loan product sale. Each purchaser will be provided a unique types and maximum available loan balances purchase destination address for the purpose of accessible to Members. acquiring a SALT Membership. In the event management closes the sale or doesn’t accept the As outlined on the next page, products and services Membership applications, any Bitcoin (BTC) or are made available to Members in several tiered Ethereum (ETH) tendered by an applicant will be packages, representing minimum redemption promptly returned by the multi-signature wallet net thresholds. Benefits associated with Membership of any outgoing fees charged. status are based on redeemed SALT. Each tier enables qualified members to gain access to increasingly customizable credit products, ranging 4.1 Membership Status from fixed rate term loans to lines of credit and Membership to the SALT Lending Platform is a crypto-secured credit cards, all collateralized by prerequisite for a Member to access information and blockchain assets. Additionally, SALT can be spent obtain the financial products offered through the to reduce a portion of the interest rate associated with SALT Lending Platform. In order to purchase a a financial product underwritten by a lender on our Membership, a person or entity must create an platform. Members have the option to redeem SALT account by providing a username and an email Membership prior to the closing of a newly address, among other requirements established by originated loan in exchange for a reduced interest SALT Lending. Satisfactory completion of both rate. This is called “buying down the rate”, and it Anti-Money Laundering (AML) and Know Your permanently lowers the monthly interest payment Customer (KYC) screening is required before due for the duration of that loan. Access to the distribution of any purchase in excess of $2,000.00 platform API is also denominated in SALT (two thousand dollars) USD, and may be required for Memberships, as is access to the platform’s lender any other purchase amount, as determined by SALT network for institutional accounts. This service Lending. Any Member actively looking to obtain a offers clients, such as exchanges, wallets, and digital financial product may be required to complete asset custodians, an API subscription service further Anti-Money Laundering (AML), Know Your whereby they can access the SALT Lending Customer (KYC) and SALT suitability screening. marketplace to offer credit products to their own customer base, for a subscription access fee. This Membership offers a subscription to the SALT API plugin is available to them and ultimately Lending Platform and is used as payment for utilizes capital arranged via the platform’s lender products and services. An initial purchase of a SALT network. Subject to prevailing market exchange Membership, in any quantity, results in an immediate rates. Terms and conditions may apply. redemption representing the purchase of a base

Select products and services, such as hardware devices, are available for purchase at additional cost. Loan products available at launch are subject to Lender determined product offerings. SALT Lending anticipates that only bitcoin collateralized US dollar denominated products will initially be available. Annual Membership fees are subject to regular market based price adjustments.

The SALT Network 5. Sample Platform Use Cases The borrowing power made available to Members Crypto-Exchange - Integrated Leverage will be based on either the summation of a single asset’s value or that of a portfolio of various A crypto-currency exchange may desire to offer its blockchain assets. clients leverage through their internal interface. The attractiveness of the products offered through SALT Lending is designed to enable this by the SALT Lending Platform increases in conjunction providing a streamlined API integration whereby, an with an increase in the number of participants exchange can utilize the platform and utilizing SALT Membership, resulting in a classic instantaneously offer leverage terms to their network effect. SALT Lending’s marketplace offers customer base without requiring their users to consumer borrowers access to affordable credit, and directly interface with the SALT Lending Platform. allows individual and institutional lenders the Capital is arranged by our extensive lender network opportunity to lend against a new class of assets. As and seamlessly integrated into the end user’s both sides of the equation grow, the advantages experience. An arrangement of this nature requires (reduced risk, lower cost) scale accordingly, the crypto-exchange to purchase an Enterprise attracting even more borrowers and lenders. The Membership package and redeem SALT increased participant pool generates competitive Memberships for use of the API. interest rate dynamics and data, which is used to improve the effectiveness of SALT Lending’s risk ICO - Business Development Line of Credit models. A startup that has completed a token offering may look to use sale proceeds for development of their The SALT crypto-secured credit card business. Often these costs require payment in various national currencies and necessitate the liquidation of the digital currency raised. An Enterprise Membership would allow the startup to access a working capital loan or line of credit to help them grow their business, without having to liquidate their blockchain assets. Miner - Working Capital Loans Proof of Work mining requires significant fixed and variable capital expenses. A mining operation must be constantly acquiring or developing purpose built computer chips while also purchasing electricity to The SALT crypto-secured credit card is a form of a run their systems. Often these R&D costs require line of credit that is collateralized by blockchain payment to third party suppliers denominated in assets. It will operate on established credit card various national currencies. In order to maintain payment processor networks and allows for production, a mining operation must therefore sell payments in national currencies. their mining reward to reinvest in development. With a SALT working capital loan, a miner can now better manage their capital allocations and opportunistically sell mined inventory when the time is right.

6. The Technology Key features of the SALT Oracle: SALT Memberships exist on the Ethereum o" Monitoring of both the loan origination and the Blockchain and loan collateral is recorded on its payments made by the borrower to the lender native blockchain. SALT’s Secured Automated o" Monitoring of the value of the blockchain asset Lending Technology is a protocol and asset agnostic held as collateral architecture. Any blockchain asset, including those o" Generation of alerts if the value of the blockchain that exist on permissioned distributed ledgers, can be asset drops below an agreed upon threshold used as collateral and managed by our smart credit o" Triggering of maintenance calls contracts. Our SALT oracle creates multi-signature o" Storage of collateral until loan terms are fulfilled smart contracts on the collateral's native blockchain o" Dispersal and/or liquidation of collateral or an external blockchain, case depending. Any according to loan terms external transfer of the collateral, whether it be a liquidation event or a reversion to the borrower, will The SALT oracle operates autonomously. However, occur on-chain. a minimum of three signatures are always required to trigger a liquidation order. This redundancy provides an added level of security. The SALT Lending Platform uses global server redundancy to protect its Members. Servers are distributed across several continents, through third party cloud based web services and hardware devices. Additionally, SALT Lending takes advantage of fully distributed server systems. SALT Lending’s decentralized, blockchain based technology platform automates key aspects of operations, including: the borrower application process, data gathering, underwriting, loan funding, servicing, collateral management, regulatory If the threshold for collateral liquidation is breached, compliance and fraud detection. This provides a the SALT oracle triggers a liquidation event which is significant time and cost advantage over traditional co-signed by other parties. Liquidation events may lending business models and we believe it enables us include fees which are passed along to the borrower. to provide a superior user experience to both The margin requirements are determined by lenders borrowers and lenders. and agreed to by borrowers. Terms are clearly outlined in each loan agreement. The SALT Members interact with the SALT Lending Platform collateral wallet is a multi-signature blockchain either through a web and mobile user interface (UI) wallet that stores collateral and automatically or via an application program interface (API), which enforces lending terms. Throughout the duration of allow seamless integration of the loan platform the loan the borrower retains ownership of the functionality directly into the backend systems of underlying blockchain asset and a key to the multi- Enterprise Members. Whether through the UI or API, signature wallet. Enterprise Members are able to offer decentralized leverage products to their own clients via their existing systems. The SALT Lending Platform can be directly integrated into hardware wallet devices allowing for additional security for loan collateral.

7. Privacy Community has been crucial to our development. The largest discounts are being provided to the The factors that define a Member’s participation earliest Members who provide direct feedback and profile are private by default and are only revealed to influence our platform’s development, as we move other platform participants with the explicit consent from the prototype phase to launch. The sale of the Member. Data on the platform is held in a environment is designed to gather feedback. SALT distributed way. This is important to avoid the user Lending is offering participants a discount for data breaches that befall centralized databases. With helping to improve the systems, interface and the SALT Lending Platform, loan collateral is network strength. Each SALT Membership will independently secured in unique smart contracts initially retail for $10.00 United States dollars (USD) associated with individual credit agreements. following the discounted sale period. Continual development requires developers to have The sale will not follow a strict timing mechanism. permissioned access to update the software and as a Instead, a set number of memberships will be result, the back-end marketplace will be centralized available for purchase at a set discount level. and under the control of SALT Lending as an Members will be unable to withdraw their SALT organization. The platform inherits the trust- Memberships until the discounted sale and sensitive aspects of the protocol tokens which independent review is completed, and Memberships underpin the products offered by SALT Lending. have been allocated and disbursed. Following the initial discount, SALT Membership will be available SALT is committed to keeping any and all personal for purchase at full retail price. information collected from the individuals that visit our website and make use of our platform accurate, confidential, secure and private. SALT is however, required to verify the identity of Members who apply 9. Business Development for financial products through the platform. SALT Lending completed a seed capital funding round in early 2017 raising over $1 million USD, for 8. Sale Mechanics the purposes of capitalizing the company to develop the SALT Lending Platform. All executive members SALT Memberships will initially be distributed in of the team and board members have contributed the form of a discounted sale. The purpose of the personal funds to the development of the software discounted membership structure is to attract and the company. SALT Lending does not intend to Members early on who can provide feedback on our liquidate any cryptocurrency generated from prototype as we further improved our product. The Membership revenue. SALT aligns itself with the participation and feedback from the SALT “hodl” ethos of the crypto community and will

borrow against the company’s balance sheet. This is designed to emphasize SALT’s business model. Management intends to use debt to fund further development of the platform. Future expenses may include security and financial audit fees, legal, regulatory and other consultancy fees, retention of talent, acquisitions, future patent registration, systems licensing, and marketing fees. SALT Lending intends to have its financial position audited by a top tier accounting firm on a quarterly basis. External and internal software security audits are also an ongoing part of SALT’s business model and have been performed by Spirent Communications Inc. The lending and securities industries are highly regulated throughout the world and the business in which SALT Lending operates is subject to complex rules and extensive regulations. Parts of the business are subject to licensing and examination by various regional, federal, state and local government authorities. The ability to serve a global Membership base is key to SALT Lending’s business model. As a result, a considerable budget will continue to be allocated towards the on-boarding of new jurisdictions. This process entails meeting legal and licensing requirements to ensure regulatory compliance across continents and international borders. This also often entails establishing regional offices, legal counsel and several service providers. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Budgeted!Expenses!

10. Membership Supply 11. The SALT Financial Inclusion Initiative A total fixed supply of 120,000,000 (one hundred and twenty million) SALT Memberships will exist, with a fractional supply in circulation representing We intend to set aside two percent of the total sale only those that have not been redeemed and are now proceeds for the SALT Financial Inclusion Initiative, held for sale on the platform. SALT Memberships which seeks to provide blockchain backed lines of are sold in whole integers. The smallest SALT unit is credit to anyone who is currently unbanked and/or is one hundred millionth. unable to get credit as a result of social exclusion. Loans will be issued to qualifying applicants and collateralized with bitcoin from sale proceeds. Expected Allocation Memberships Percentage Secure accounts will be established for individuals Discounted Sales 54,500,000 45.42% and an education on blockchain-backed loans will be Platform Development 17,550,000 14.63% made available to help recipients use credit the right way, creating “good debt”. Employee Discount 2,450,000 2.04% Retail Sales 45,500,000 37.92% Total 120,000,000 100.00% 12. Regulation Some elements of SALT Lending’s businesses are subject to state and federal regulation within the United States and to foreign laws and regulations. Loans arranged through the SALT platform are originated by an SEC registered investment advisor or other on boarded registered banking entities. SALT Lending Holdings, Inc., and the loans originated through the SALT Platform, must comply with applicable state and federal lending and usury The SALT wallet will be built into the SALT laws, such as: the federal Consumer Credit dashboard. The wallet will give Member's the ability Protection Act, the Truth-in-Lending Act, the Equal to upgrade their Membership, send additional SALT Credit Opportunity Act, the Fair Debt Collection to the public ETH address currently associated with Practices Act, the Dodd-Frank Wall Street Reform a Member's account, or choose a different public and Consumer Protection Act, the Servicemembers ETH address in which a Member would like to store Civil Relief Act, the Military Lending Act, the Bank and secure their SALT. Direct hardware wallet Secrecy Act, the USA Patriot Act, the Electronic integration will be available for added security. Fund Transfer Act, the Electronic Signatures in Global and National Commerce Act (ESIGN) and We estimate that Member wallets will be available other federal and state laws governing privacy, data 15 days after the independent review of Membership security and prohibiting unfair or deceptive business transactions. The internal review is estimated to practices. require one to three weeks from the close of the discounted sale. For the sake of speed, we will allow As non-bank entities, SALT Lending Holdings, Inc. access to wallets once the members transactions have and its affiliate, SALT Platform, LLC, have been reviewed. Access to the wallet will vary based developed extensive best practice policies and upon when a member’s transactions have been procedures intended to ensure legal and regulatory reviewed. compliance.

SALT Lending Holdings, Inc. and its affiliate, SALT Legal & Regulatory Compliance: SALT is Platform, LLC, may be subject to examination, committed to maintaining compliance with laws, supervision and other regulatory enforcement actions regulation, and licensing with governing bodies to taken by the state agencies responsible for achieve sustainable growth. monitoring consumer credit, trade, and commerce; Trust: We earn trust by acting with the highest and federal agencies, such as the Consumer Financial standards of integrity, honesty, and accountability. Protection Bureau and the Federal Trade Commission, that administer the federal consumer protection laws, trade, and commerce in the United The SALT Brand States. The SALT name originated from the historical record of when salt became more than a commodity, as it gained use as a store of value. Used as a medium 13. Brand & Values of exchange for food, clothing, and other general SALT Lending’s mission is to increase the provisions, salt broke the mold of what a commodity productivity of digital assets. This will be could be. With the invention of blockchain accomplished by adhering to the core values below: technology the boundaries are once again being pushed. We are forced to rethink what defines an Security: SALT Lending puts security and privacy asset or currency as well as the ways in which they first - our protocols and practices are designed to can be recorded and transacted. SALT is also an keep user information and assets safe and private. acronym for Secured Automated Lending Innovation: SALT seeks to continuously innovate, Technology, the name given to our programmed creating new paradigms for managing the risk in smart loan contract. The efficiencies and security realizing the value of digital assets. provided by our technology is SALT’s competitive Premium Service: SALT delivers a high quality of edge. Just like its namesake, SALT intends to be a service and an exceptional experience to empower household name, a pillar in the financial market, and the end-user. a brand that breaks the mold on how secured lending is conducted. Benchmarks

14. Disclaimer cryptocurrencies and other aspects of our technology and these markets are in their infancy and will be This material is provided by Salt Technology, Ltd. subject to many challenges, competition and a (“Salt”, the “Company”), for informational purposes changing environment. We will try to update our only, and is not an offer or a solicitation to buy or sell community as things grow and change, but undertake any securities or other financial instruments. The no obligation to do so. SALT Membership is a consumptive use product Interested parties acknowledge that the SALT permitting access to the services provided by the Lending Platform, as described herein, may never in SALT Lending Platform, as detailed above. fact operate as intended. A SALT Membership is Memberships are not intended for speculation and intended solely as a mechanism for accessing afford the holder no rights in, or claims to, any of the information and using the services offered through assets of SALT or to in any way share in any profits the SALT Lending Platform. As such, the SALT that SALT may achieve. Interested parties Membership may have a value of zero. SALT acknowledge agreeing to the Consent to Use Memberships are functional utility smart contracts Electronic Records, Privacy Policy, Membership within the SALT Lending Platform. SALT Agreement and Terms and Conditions. This Memberships are non-refundable. SALT document is subject to change and must be Memberships are not for speculative investment. No accompanied by the previously agreed to documents, promises of future performance or value are or will which remains in effect regardless of purchase be made with respect to SALT Memberships, decisions. including no promise of inherent value, no promise This paper describes the current vision for the SALT of continuing payments, and no guarantee that SALT Lending Platform. While we intend to attempt to Memberships will hold any particular value. SALT realize this vision, please recognize that it is Memberships are not participation in the Company dependent on quite a number of factors and subject and SALT Memberships hold no rights in said to quite a number of risks. It is entirely possible that company. SALT Memberships are sold as a the SALT Lending Platform will never be functional good and all proceeds received by implemented or adopted, or that only a portion of our Company may be spent freely by Company absent vision will be realized. We do not guarantee, any conditions. Membership to the SALT Lending represent or warrant any of the statements in this Platform is intended for experts in dealing with paper, because they are based on our current beliefs, cryptographic and blockchain-based software expectations and assumptions, about which there can systems. be no assurance due to various anticipated and unanticipated events that may occur. Please know that we plan to work hard in seeking to achieve the vision laid out in this paper, but that you cannot rely on any of it coming true. Blockchain, For more information visit, or email [email protected] 2017 © SALT Technology, Ltd. The SALT Hardware Wallet by KeepKey