What is Notional?
Notional is a decentralized finance (DeFi) protocol built on Ethereum that enables fixed-rate, fixed-term crypto asset lending and borrowing. The protocol is powered by fCash, a financial instrument that facilitates predictable yields and obligations.
Recent Video Interview
Main points of the interview:
- Notional Finance is a fixed-rate lending protocol on Ethereum.
- Notional enables fixed-rate borrowing and lending through fCash tokens, simplifying the process.
- New feature: nTokens streamline liquidity provision for users.
- Challenges include low borrowing demand, mitigated by the upcoming leveraged vault product.
- Partnerships, like with Balancer and Aura, drive growth and liquidity.
Prime Money Market
The prime money market allows variable-rate lending and borrowing with a unique interest rate model.
- Optimizes capital efficiency
- Offers liquidity for over-collateralized borrowers
- Interest rates based on pool utilization
fCash Tokens
fCash tokens represent future obligations or assets and are key to Notional's fixed-rate offerings.
- Transferable and tradable before maturity
- Similar to zero-coupon bonds
- Powers fixed-rate borrowing and lending
nTokens and Governance
nTokens provide passive liquidity provision across all pools.
- Redeemable at any time
- Used as collateral for borrowing
- NOTE token governs protocol changes and treasury management
Some Other Coins in the Fixed Interest Category
- Saffron.finance: a peer-to-peer protocol allowing users to customize risk and return profiles.
- 88mph: a fixed interest rate lending protocol offering fixed yield and MPH tokens.
- Pendle: a decentralized protocol for trading future yields from yield-bearing assets.
Meet the Team
The Notional team consists of experts in finance, blockchain, and design, including:
- Teddy Woodward, Co-Founder & CEO
- Jeff Wu, Co-Founder & CTO
- Pierre-Yves Gendron, Risk Analyst
- Isaac Petsch, UX/UI Designer
- And more...
Interest Rate Model
Notional employs a two-kink interest rate model to determine borrow rates:
- Rates are based on market utilization
- Kink1 and Kink2 parameters adjust the curve
- Optimized for capital efficiency and predictability in borrowing costs
Project Development
Notional has launched leveraged Pendle PTs, providing new opportunities for yield generation.
- Up to 70% yield on USDC and 30% on ETH
- Leverage strategies enhance returns
- Automated process for depositing, borrowing, and purchasing PTs
- Potential for high APY based on PT yield and borrow rate
