Crypto Academy Week 7// How to invest in Cryptocurrency (2) //Homework submitted to @besticofinder
Thank you for the Lectures so far @besticofinder.
Introduction
Cryptocurrency is gradually being accepted all around the world today, this has given rise to Alot of vague project being introduced and hence a need to scrutinize before investing in one. In our last lecture we were able to choose cryptocurrency for trading considering the following Parameters:
1)Project vision
2)Products
3)Team
4)Market.
In lectures 7, more criteria for choosing a cryptocurrency were further introduced:
1)Market Capitalization
2)Liquidity
3)Active Addresses
4)Circulating volume
All these criteria will form a basis of our comparison.
By this we will consider 2 cryptocurrency protocol in the DeFi Lending Ecosystem namely: Salt and Nexo. Both of these falls under the Lending DeFi ecosystem. Anyone is free to deposit or lend cryptocurrency with a good amount of collateral and very small interest rates. Those lending are given intrest and the ones borrowing pay intrest for approved loans.
PROJECT VISION
Comparing SALT and NEXO by Project Vision:
Secured Automated Lending Technology (Salt), has described itself as a next generation lending protocol for blockchain backed loans. Salt is a membership based lending and borrowing platform that give users the leverage to uses their blockchain asset to secure cash loans. It is programmed to accept the growing age of cryptocurrency investments. According to them, they have a technology put in place to reduce the risk of volatility. SALT envisaging a way to monitize blockchain assets in a very easy way.
SALT was founded in 2016 by a group of Bitcoin enthusiasts who aimed to prove that people didn’t need to compromise their lifestyle or forego their needs in order to pursue a long term outlook on cryptocurrency. source
Nexo is also a world's first crypto - backed backed loans. Nexo says you should have another use of your crypto asset other than selling them. They seek to make their users enjoy their crypro created wealth. Through the use of smart contracts, they want to give their users an automatic cryto-based loans with no fees at, liquidity problems handed. And many more interesting benefits.
PRODUCTS
Salt has fantastic products such as personal Loans, which can be used to make large purchase, renovations, payoff credits and re-investment purposes. Another product is business loans for entrepreneurs, stabilization which preserve the value of cryptocurrency. They are the only lending platform that has this stabilization product. Fees at Salt lending are almost zero.
Nexo provides custody, Nexo provides custodial wallet, which means a third party actually stores and secures your wallets. Another is varieties of cryptocurrencies, Nexo has over 80 cryptocurrency in place for business. Nexo says they are very secure and know that working with cryptocurrency poses serious risks, so they have a robust solution to cater for problems of volatility.
Team
Salt has a wonderful team to thier credit 49 members with 9 being bitcoins professionals.
This sounds great as we expect the best from this caliber of team members.
Nexo on the other hand also have good teams member but not as salt, infact they are currently recruiting new team members.
Market
Salt is currently #640 according to coinmarket and at the time of this writing, with a live market of over 30 million USD and a circulating supply of over 80 million Salt coins out of the 120 million available salt coins. It is traded by about 7 exchanges.
Nexo has a circulating supply of 560 million Nexo coin, with a trading volume of about over 1 trillion USD and marketed by about 5 exchanges with about about 1 trillion Nexo coin as maximum supply.
Liquidity
Salt is designed with cryptocurrency volatility in mind. In a case where the borrower cannot pay for his loan and it almost reaching Liquidation stage, the mechanism converts it into a stable coin. This is a very unique function in Salt lending.
Nexo on the other hand, is backed by cryptocurrency, it is automated and uses smart contracts to execute its functions. Nexo is usually marked to exchanges, miners etc who want liquidity from their asset.
My Conclusion
Both coins are promising, good project, extraordinary market cap, they are both secured on the Etherum blockchain. Salt seems to has a lesser circulating supply, than it's Nexo counterpart. Salt has a great team to its credit. Salt is traded in about 7 exchanges which means a wider range of market. Nexo is also backed by cryptocurrency. Based on this assertion, I see SALT lending as a viable investment,it might only take some time.
Thanks