Notional is a protocol that facilitates fixed-rate, fixed-term lending and borrowing through an innovative financial instrument called fCash.

Risk Rating
Watch Out
Protocol Code Quality
Protocol Maturity
Protocol Design
What we like
Notional offers users easy access to fixed-rate and fixed-term lending and borrowing.
What we like less
Notional is controlled by a limited 3/5 multisig with no timelock in place. Loans also act as zero-coupon bonds which means the users only earn yield at maturity through a positive cash balance.
What it means for you
Offers you a great way to lock in stable lending rates for a fixed duration.
  • Website
  • Token: NOTE
  • Tags: Lending
Key Metrics
  • TVL: $32.3M (Rank #85)
  • TVL Ranking by Lending: #17
  • Blockchain: Ethereum
  • Chain TVL
    • Ethereum: $32.25M
Risk Assessment
Watch Out
Protocol Code Quality
  • Code reviewed by several experienced auditors including ABDK and OpenZeppelin
  • Public team promotes accountability
  • No documented protocol hacks since launch
  • Basic controls to prevent oracle price manipulation
Protocol Maturity
  • Core protocol launched in 2021; maturity over 18 months reduces technical risk as smart contracts are sufficiently battle-tested
  • Top 10% by total value locked reduces risk
  • Governance decentralization is in the roadmap
  • Several critical governance issues documented
Protocol Design
  • No concerns identified
  • Cross-collateral markets are exposed to systemic risks as each asset creates incremental risks for the platform as a whole
Things to know about Notional

How Notional works

Notional provides users access to fixed-rate financing in a decentralized manner. Borrowers can lock in a fixed-rate loan that is payable at a specified future date. Lenders can deposit funds to provide liquidity for a fixed duration (up to 12 months) while earning a fixed yield. Users can also provide liquidity within Notional to earn variable rate yield plus NOTE incentives. Providing liquidity on the platform is similar to market making on a decentralized exchange, as it follows the same automated market maker (AMM) concept where users can trade between fCash and cTokens when lending or borrowing. fCash is the token given to users who lend or borrow on Notional. It represents the user's position and is created in asset and liability pairs. For example, if users lend USDC to the Dec 23, 2023 maturity pool, then they will receive Dec 23, 2023 fUSDC which will be redeemable once the pool reaches maturity. This token represents the USDC users lent out plus the interest owed for lending, which is represented by a positive cash flow at maturity. Users who deposit collateral and borrow the same maturity USDC will receive fUSDC representing their principal and interest owed. In this case, the fUSDC represents a negative cash flow that represents the obligation the borrower is required to pay at maturity. In essence, fCash represents a future cash flow payment that can be actively bought and sold in fCash markets prior to maturity. This liquidity is enabled between lenders and borrowers using Notional's AMM-based liquidity pools. For each fixed maturity date, there is a liquidity pool that holds fCash and a settlement currency (cTokens). For example, the Dec 23, 2023 maturity USDC pool holds both cUSDC and fUSDC. Users who provide liquidity deposit both cTokens and fCash as liquidity pairs. These liquidity positions are represented by nTokens and served as the counterparty to active lenders and borrowers. nTokens enable users to passively earn returns from three sources including interest earned form cToken and fCash, trading fees, and NOTE incentives. They are redeemable for a share of total liquidity across all active maturities for a specific asset.

How Notional makes money

Notional earns transaction fees every time a user lends or borrows, as well as COMP incentives. Currently, the platform's transaction fees are sent to the protocol reserve while the COMP incentives are converted into LP tokens to rewards NOTE stakers (sNOTE).

How you make money on Notional

You earn fixed lending fees on Notional by depositing your idle crypto assets to be used by borrowers over a fixed period. You can also provide liquidity to earn fees from both lending and trading fees. Lastly, sNOTE holders also earn trading fees and protocol rewards.

Notional Pools