What Is Notional Finance
Notional Finance is a crypto lending and borrowing protocol that operates on fixed rates and terms.
Background
Teddy Woodward and Jeff Wu founded Notional Finance in 2021.
How It Works
Notional Finance utilizes a unique mechanism called fCash, to connect lenders and borrowers. The governance of Notional Finance is carried out through the NOTE token.
Borrowers can mint fCash tokens at a discounted rate by depositing collateral, and lenders can purchase these tokens at a discounted rate. These tokens can be redeemed for their currency type at maturity, yielding a fixed return. When a loan’s collateral is insufficient to maintain a certain loan-to-value ratio, it is liquidated. NOTE tokens serve multiple governance purposes, such as voting for different collateral assets, activating new maturity dates, deploying treasury assets, and incentivizing liquidity for nTokens.
Key Takeaways
- Notional Finance is a cryptocurrency lending and borrowing protocol that operates on fixed rates and terms.
- It was founded by Teddy Woodward and Jeff Wu in 2021.
- The system uses a unique mechanism known as fCash to connect lenders and borrowers.
- Borrowers can mint fCash tokens by depositing collateral, and lenders can purchase these tokens at a discounted rate.
- The governance of Notional Finance is carried out through the NOTE token, which serves multiple purposes, including voting for collateral assets, activating new maturity dates, deploying treasury assets, and incentivizing liquidity for tokens.
