Today, DeFi can only serve a small segment of the Lending & Borrowing market in Crypto because interest rates are currently too volatile, providing no certainty to both borrowers and lenders. Notional finance is one of the first Lending projects to offer users a fixed interest rate for both lenders and borrowers, and this is a new step for the development of DeFi. As the scale of cash flow is getting bigger and bigger, stability will become more and more critical.
In this article, I will introduce you to Notional finance, including the following information:
- What are Notional finance and the NOTE token? How does Notional finance work?
- Specific details about NOTE token and its tokenomics, including its up-to-date price, key metrics, distribution and use cases.
- How to get NOTE? Where to store it?
- Roadmap & information about team, investors and partners.
What is Notional Finance?
Notional Finance is a decentralized protocol enabling fixed-rate lending and borrowing of crypto-assets on Ethereum via on-chain liquidity pools. Lending and borrowing operations are carried out through a financial intermediary called fCash.
How does Notional Finance work?
fCash is a transferable token that represents a user's ability to lend or borrow and the payment deadline. fCash tokens are always created in pairs of positive fCash tokens (assets) and negative fCash tokens (liabilities).
- A positive fCash balance is an asset, which is redeemable for one currency at maturity.
- A negative fCash balance is a debt obligation, obliging a negative fCash holder to provide a currency at maturity.
Owning fCash in the portfolio can be understood as owning a certificate of liability for lending or debt repayment.
The liquidity pool in Notional is built according to the AMM mechanism like in DEXs, which allows lenders and borrowers to lend and borrow without having to wait for a counterparty. A liquidity pool will include fCash token and the corresponding token, and the pool will have a maturity schedule to ensure the safety of the loans.
How it works
Notional's operating mechanism can be considered an AMM DEX with fCash as a trading unit, whereas users will trade fCash to own the right to lend or exchange fCash for loans.
- Borrower: Borrowers will mortgage their collateral in exchange for a pair of fCash positive (asset) and negative (liability). When the borrower wants to borrow stablecoins, he will exchange positive fCash to receive stablecoins. When he wants to repay, he will exchange stablecoins for positive fCash.
- Lender: Stablecoin lender is someone exchanging stablecoin for fLash from LP. When fCash matures, the lender will be refunded the stablecoin and interest.
- Liquidity Provider: Liquidity providers have the same responsibilities as DEX providers, maintaining pools and getting benefits from transaction fee and reward from the project.
What makes Notional special?
Notional stands out because this project gives users a fixed interest rate when lending and borrowing, which gives users more control when making decisions.
Defi activities such as DEX, farming, lending & borrowing are growing at a fast pace, however, the prominent issue in the Defi space is the instability of liquidity pools due to fluctuations when the market changes. Especially with lending & borrowing, because these are leverage creation activities which require collateral, so security will be the biggest priority for users.
Detailed information about NOTE token
NOTE Key Metric
- Token Name: Notional.
- Ticker: NOTE.
- Token Standard: ERC-20.
- Contract: Updating…
- Token Type: Utility, Governance.
- Total Supply: 100,000,000 NOTE.
- Circulating Supply: Updating…
NOTE Token Allocation
- Liquidity Providers: 50%
- Community: 23.6%
- Team: 19.8%
- Investors: 6.6%
NOTE Token Sales
- April 2021: Notional raised 10 million Dollars from Serie A Funding (Private sale).
- May 2021: Notional raised 1,2 million Dollars from private sale.
NOTE Token Release Schedule
NOTE Token Use Cases
NOTE is Notional’s native token that plays the role as governance token :
- Proposing upgrade to the project.
- Deciding new asset pool and maturity time.
- Choosing collateral and LP incentive .
How to get NOTE token
If you have participated in providing liquidity, lending or borrowing that worths more than $50 before July 4, 2021, you will receive an Airdrop of NOTE tokens.
How to buy NOTE token
NOTE is an ERC-20 token, so it can be traded on Coin98 Exchange through DEXs like Uniswap, Sushiswap,... when NOTE is listed on these DEXs.
How to store NOTE token
NOTE is an ERC-20 token, so it can be stored on Coin98 Wallet. Details will be updated later.
Team, Investors and Partners
Two notable names in the list of Notional’s investors are Spartan and Coinbase; the presence of these two funds firmly strengthens the belief in Notional finance.
The lending sector in the DeFi space has seen strong growth with many prominent players such as Aave, Curve, or Anchor. Up to now, Notional's locked value is approximately 14 million USD, ranked 22nd on the list and can be said to be insignificant compared to the enormous projects above.
Notional has only existed since the early months of 2021, therefore, it will need more time to improve. Notional offers the fixed interest rate mechanism to users, which differentiates itself from the general lending project in the market.
Is Notional (NOTE) a good investment?
I hope that you have understood what Notional is with the information mentioned above. This article should give you a deep insight into the project, so there is no financial advice. You should Do Your Own Research before conducting any investment and be responsible for your own fund.
However, Coin98 will provide some notable points about the project to give you the best overview to make your own decisions:
The fact that Notional brings stability to lending and borrowing activities is a significant breakthrough factor. The main problem of the current lending sector is that users enjoy decentralization and substantial profits in exchange for stability when investing. Notional gives lenders and borrowers greater control over assets and helps reduce investment risks, thereby creating peace of mind for users.
Lending platforms will not only serve individual users but also have more institutions participating in lending and borrowing. When the scale of cash flow into DeFi space is getting larger and larger, the appearance of fixed interest rate will become more critical.
Organizations with large capital will prioritize safety over unpredicted high profitability. Notional is the leading project in implementing fixed interest late, which is a great advantage in building an image and strengthening its market position.
On the other hand, Notional also has certain risk possibilities. Notional is built on Ethereum, whose ecosystem already has many prominent names in the active Lending array such as AAVE, Maker, InstaDapp or Compound. Encountering such great competition will certainly be an obstacle to Notional's growth.
Notional finance is a Lending protocol on Ethereum, this project helps users to lend and borrow with fixed interest rates. This will significantly give users better assurance when investing in DeFi space and this is an advantage for this project to attract big clients. Two of the most prominent investors are Coinbase Venture and Spartan, which shows that Notional Finance has significant potential to break through.
You’ve been through an article about Notional finance. I hope it has helped you in gaining more helpful insight into this project and understanding its potential.
If you want to know more about Notional finance, please feel free to leave a comment below and join Coin98 Community for further discussions!