4 Ways MELD Adds Value To Crypto

4 Ways MELD Adds Value To Crypto

Josh Noriega

Josh Noriega

MELD Ambassador

January 19, 2022

Driven by their creativity and ambition to “bank the unbanked,” MELD is making history in the world of cryptocurrency. Between being the first crypto-project to launch the first ever ISPO and their heavily principled stance on financial efficiency, MELD has demonstrated the boldness and direction to push cryptocurrency beyond its limits. MELD is brewing some incredibly creative products that crypto investors will get a lot of mileage from, and they’re making all the right partnerships to do more. Here are some specific ways MELD adds transformative value to the cryptocurrency market: 

MELD Unlocks The Monetary Value Of Your Crypto 

There’s no shortage of crypto investors that are “crypto rich, but cash poor.” Everyone from miners that store their earnings in cold-storage to crypto enthusiasts that see the long-term value knows the struggle of unrealized value. Behind the walls of asset liquidation and capital gains taxes is billions of dollars in unrealized value. The frustration of having a portfolio of your favorite crypto-assets explode in value, only to have little to no impact on your life, is not an experience unfamiliar to the crypto community. 

MELD offers a capital efficient way to solve this problem, in the form of crypto collateralized loans. As put by Stuart Hollinger in another MELD blog, the benefits to this approach is that “higher capital efficiency means better price stability in the DeFi ecosystem.” MELD literally capitalizes on this principle by opening services to BTC, ETH, BNB, MATIC and ADA holders. Since loans are not subject to capital gains tax, these crypto collateralized loans allow you to access the value of your crypto without the need to liquidate your assets. 

MELD Will Pay You To Take Out Loans

It sounds too good to be true and perhaps logistically unrealistic, but it’s actually quite reasonable that MELD is able to pay you to take out a loan. Unlike traditional centralized banking that makes money from your assets, and charges you an unreasonably high fee to let them do it, MELD partners with you by giving you a portion of the money they earn from putting your collateralized assets to work when you take out a Genius Loan. What’s particularly unique about the Genius Loan is that this money is not paid back to you in the form of yield (which is often taxed as income in many countries), rather it is applied to the principle of the loan. Therefore, all you would be responsible for in settling the terms of a Genius Loan is the interest on the loan (which is tax deductible in many countries). 

The Genius Loan is extraordinarily well titled. It achieves the pinnacle of “capital efficiency” by allowing users to access the value of their assets without needing to pay capital gains taxes, it eliminates the need to pay income tax on returns, and it enables a tax write off on interest payments. 

MELD Provides True Decentralized Accessibility

MELD may be the first ever non-custodial fiat-lending protocol in the history of DeFi and cryptocurrency. There aren’t any notable crypto-backed lenders that leave the control of assets and private keys in the hands of its users. The “not your keys, not your crypto” mantra from the more experienced side of the crypto community, knows the value of maintaining responsibility over your own assets. It’s consistent with the overall mission and philosophy of crypto because it protects the people against systematic failure, malicious actors, and centralized abuse of power. It also further enables greater interaction within the larger crypto ecosystem as we should freely choose. 

MELD Is Building Bridges 

MELD is scoring more points in the area of accessibility with the use of wrapped assets. The world of DeFi on Cardano will expand through a multitude of MELDed (wrapped) assets, MELD’s plan to integrate mBTC, mETH, and eventually mBNB. Shortly after MELD launched their ISPO, Vent reached out to MELD to develop a two way bridge by producing ADAmatic. This bridge allows users to create MELDed Cardano-based assets on Polygon and MELDed Polygon-based assets on Cardano. This is all made possible by the partnership with Polygon’s layer 2 Ethereum solution.

If that wasn’t enough cross-chain accessibility, MELD extends additional bridging out to the Force Bridge as a result of the partnership with Nervos. This bridge enables cross-chain support between Cardano, Bitcoin, TRON, EOS, and Polkadot. Given the growing relationship between Nervos and IOHK, this direct exposure to MELD is not just impressive in size but also in the forecasted relevance to the greater Cardano ecosystem.

Conclusion

This level of interoperability adds a tremendous amount of value to the overall use-case of MELD. It opens accessibility to a vast majority of the crypto community and it provides an easy path into the Cardano ecosystem. The value that MELD brings to the crypto space is founded on the principles of a mutually beneficial partnership with its users, capital efficiency, and symbiotic association with the rest of the crypto world. Somehow, MELD managed to find a way to do all this in a decentralized fashion, enabling users to keep complete control of their assets. MELD is most known for being the first project bold enough to launch an ISPO but there are far more ways that MELD is making history.

Disclaimer

The opinions shared within this article are those solely of the MELD Ambassador. Note that the content within should not be considered financial, legal, or tax advice. Neither the author nor MELD Labs PTE Ltd. are financial, legal or tax advisors. None of this content should be used to make any form of financial, tax, or legal decisions. Do your own research and consult professionals as needed for official policies, restrictions, and requirements in your jurisdiction.

If you believe in the MELD vision, want to support this initiative, and want to help promote the future of finance then we want you to join the MELD Ambassador Program!

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