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Teddy and Jeff: Notional Finance Enables Fixed Rate, Fixed Term Lending and Borrowing on Ethereum

Jan 14, 2021 ·

By Tom Shaughnessy

Chain Reaction Host Tom Shaughnessy  hosts Teddy Woodward and Jeff Wu of Notional Finance.  

Notional is a protocol on Ethereum that facilitates fixed rate, fixed-term lending and borrowing of crypto-assets via a novel financial primitive called fCash. Fixed rate financing touches all corners of the modern financial markets. The majority of US debt is issued at fixed interest rates because they provide certainty and minimize risk for market participants. Notional brings this capability to the decentralized financial system on Ethereum and gives crypto users that same access to stable financing.

The full interview transcript is available below the video!

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Music Attribution:

  • Cosmos by From The Dust |
  • Music promoted by
  • Creative Commons Attribution 3.0 Unported License




Show Notes:

(1:17) – (First Question) – Teddy’s Background.

(3:11) – Jeff’s Background.

(6:02) – Notional Finance Elevator Pitch.

(8:33) – Key Differences between Notional Finance and other competitors.

(11:50) – Rates / Collateralization Walkthrough.

(14:42) – Thoughts about liquidity Fragmentation.

(16:23) – The Collateralization Framework.

(18:01) – Insights about DEV / Smart Contracts.

(22:55) – How Notional affects DeFi.

(26:34) – Will Notional attract Traditional Investors.

(28:24) – What’s on the roadmap for Notional Finance.

(29:56) – Notional vs. Compound?

(33:09) – Notional Finance Team.

(34:00) – Does Notional need a Community.

(36:10) – How does the model work (to earn money).

(36:49) – Where to find Notional Finance.

Interview Transcript

Tom (00:01):

Hello, everyone. Welcome back to the podcast. I’m your host, Tom Shaughnessy. Today, I have on Teddy and Jeff from Notional Finance, Teddy and Jeff, how’s it going?

Teddy (00:08):

It’s going really well. How are you, Tom?

Jeff (00:11):


Tom (00:14):

Awesome guys. I’m doing good, and thanks for hopping on. Teddy, let’s start with you. Give us your quick background and then we’ll go over to Jeff.

Teddy (00:23):

Sure thing. So my quick background is, I started my career as a trader. I traded interest rates swaps at Barclays. So I worked at an investment bank for about three and a half years after I graduated college. And then after that I was getting a little bit bored at the bank and I decided to jump into Crypto in 2018 and traded Crypto for about a year and a half, and then towards the end of that I really wanted to start a company and I thought DeFi was just like really cool.

Teddy (01:00):

And so I saw a compound, which was rising to prominence at the time, and to me that was really interesting because it was the first step in a real interest rate market on chain. And I thought that was just like an enormous opportunity and a perfect opportunity for me given my background and so I felt that the logical next step for DeFi was going to be the ability to lend and borrow at fixed rates of interest because everything at the time was just variable. So I came from traditional finance, I knew how big fixed rates were. And so I figured, all right, this is going to be a huge thing. So I was working in London and I moved to San Francisco to try and start this company, and I met Jeff the first day I landed there and we’ve been working together ever since.

Tom (02:00):

Yeah. That was a great first meeting. Where did you guys meet?

Teddy (02:05):

Yeah. Jeff, you want to tell the story? I mean, he’s a little better.

Jeff (02:13):

Yeah. Yeah, so we met at the SF Blockchain Week Hackathon. That was, I think the one in late 2019, it was sponsored by Cosmos and yeah, I was there. So at the time in 2019, just a little bit about my background. So I’ve been in the Bay area since 2011, working in tech. So largely doing like product management or engineering management for the distributed systems in big data and data sciences, things of that nature. I got into Crypto in 2014, one of the engineers on my team just always had a GDX up and was like constantly trading Bitcoin and maybe not working as much as he should, but we just like got into talking about Bitcoin, and I was like, okay, this sounds like super interesting, but didn’t really understand what the use case was, but I kept up with the tech and kept up with the theme.

Jeff (03:14):

2017, I read the Maker White Paper, which is really what clicked on the light bulb for me, because that was definitely that was the first time I felt like the first real use case for like building a financial system on this distributed network, right. So fast forward 2019, I took a job at Splunk, which is a large data platform, data analytics company here in the Bay area, and I was the product manager for their Blockchain team. So I spent most of 2019 tagged a lot of corporates talking to people, all across the spectrum, just around Blockchain in general, and one of those things was going in a lot of conferences.

Jeff (04:02):

So I was at SF Blockchain Week at the Hackathon just milling about, just seeing what people were up to and like the beginning of the Hackthon and I think Teddy was seeing that we were just looking for things to do, I guess, and he asked me if I had any ideas so I said you know what? I’ve been thinking about this compound thing and I don’t really know anything about finance and stuff, but I think fixed rates… I think that’s something that people might really like. I’ve got really big because that was his thing. Right?

Jeff (04:39):

So from there, I just felt like we worked really well together. Just from the beginning we were very honest with each other, because Teddy would be like, “No, that’s stupid, that’s not how traders would see something like this,” And I would be like, “Well, you really can’t do that on a Blockchain like there’s all kinds of Google mutations.” And so I just felt like we had this really good working relationship because we could fill in the gaps of each other’s knowledge. So yeah, since then it’s been a great working relationship.

Tom (05:17):

No, that’s awesome. Being able to be honest at Canada’s co-founders is like one of the major checkbox items for successful team so, that’s great to hear. Guys, let’s do the quick elevator pitch on what Notional Finance is. I know we’ve been throwing around fixed rates and things like that, but it would be great to just hear an overview and then we’ll go into the specifics throughout the podcast.

Teddy (05:38):

Yeah. And actually before we move on, I was just going to say a little bit about Jeff.

Tom (05:41):

Yeah, sure.

Teddy (05:44):

So basically, I think it works really well because we’re both experts in what we do and so when I say something really stupid and from like a technical or engineering perspective, Jeff’s able to call me out and I don’t feel too bad. He doesn’t know. So it just works really well.

Tom (06:10):

I’m Sure you’ve gone through a lot of long pitches with him in your head and then you talk to Jeff and first-

Teddy (06:19):

He will say no.

Tom (06:19):

… 30 seconds, like no, we can’t do that.

Teddy (06:19):


Tom (06:19):


Teddy (06:21):

Okay, cool. Yeah. So about Notional, what Notional does is it’s fixed rate lending borrowing of Crypto on Ethereum. So you can thinking about it like a fixed rate compound. So currently we support di USB-C ether and wrapped Bitcoin. What you can do is lend and borrow your USDC and dye fixed using ether and REP Bitcoin as collateral. So, that’s what you can do today. And in the future, we’ll be adding other currencies for lend, borrow, other collateral types, etc.

Tom (06:59):

Awesome. Sorry. I was muted there for a second. And you guys are live today, correct?

Teddy (07:03):

That’s correct. So we launched in Beta late last year and this was before we were audited. So our contracts were under audit at the time. And so we, we did a what they call a guarded launch, right? And we had kept the loan sizes at a thousand dollars. So it was mainly just like to give people a look at what we’ve built and get people familiar with it, start talking about it, but just recently, we got our audit report back from OpenZeppelin. We’re all clear. And so we have removed the caps and we’re doing a full launch this week. We’ve got about $3 million in liquidity on the platform now, which means that you can borrow and lend in significant size. So you can borrow, for example, up to 300 K USDC and less than 1% slippage. So you can borrow 300 K USDC today, fixed at less than 5% interest.

Tom (08:08):

And Teddy, how does that compare to borrowing USDC on other platforms? Like, let’s say Compound, let’s say Ave, maybe throwing a Block5 there. I know there’s a lot of competitors to think through, but what are the key differences? I mean, the fixed rate is amazing, but is that a concern when we’re talking about stable coins or is that less of a concern? Just a quick question there.

Teddy (08:33):

Yeah. So I think it’s definitely a concern and you can absolutely see that over the course of the last month. Right? So if you, for example, look at USDC borrowing rates on Ave, because we’ve been in this bull market where people have been going a little crazy and trying to borrow to get leverage, I mean, borrow rates have just been extremely volatile. So on Ave, borrow rates twice over the past month went over 60% APY, right? 60. Yeah. So it’s pretty intense. I mean, if you look at the graph of borrowing rates, it’s pretty crazy. And as a matter of fact, if you look at the stable borrow rate on USDC, on Ave today, that’s currently at 18%. So, yeah. I would say that fixed rates are pretty attractive right about now.

Tom (09:30):

Yeah, no, I was actually lending or supplying my USDC to Ave last week or this week I believe and I think the interest rates were over 30% and I was like, “wow.” I feel like I’m yields farmer here, but it’s stable coin. And how exactly do you entice the other side of this though? It’s fantastic for me to borrow at 4% fixed rate, get a ton of USDC, like there’s so much I can do with that in DeFi Crypto, but how do you incentivize people to lend USDC at that rate? Can you earn more somewhere else? I’m assuming you probably can. I’m not too sure.

Teddy (10:05):

Yeah. So what I would say is two things. So given that we’ve just started, the 4% rates on our platform, I don’t imagine they’ll stay there forever. Right? So I think that maybe we can get into this a little bit, but when users borrow or lend on our platform, they change the interest rates. So right now the interest rates are 4 to 5%, but as borrowers borrow that liquidity, those interest rates move up. So if people aren’t willing to lend at 4% and borrowers are willing to borrow at 4%, we would expect the interest rates to rise until lenders are willing to lend.

Teddy (10:45):

Now, what I would say, the pitch for fixed rate lending, I think it’s that in the context in DeFi, the kind of APYs that you’re getting from lending on compound or Ave or yield farming, they are extremely volatile as well. And so if you can get an attractive rate of return and fix that, I think a lot of people would find that interesting from a risk management perspective. Similarly, to how if you’re managing assets in the traditional markets, you’d have some allocation to like risky stocks and some allocation to safe and low yielding bonds. I would imagine a similar effect here for lenders.

Tom (11:37):

Makes sense. And how exactly do the rates, like how are they decided? Because your site is super refreshing the easy to use. Like I’m on the borrow page, I threw in 10,000 USDC borrow, I could see the rates for April and July, around 4 or 5%, and then the collateralization like Toggl is so easy. It’s just low, medium or high. I would be eager to learn like how the rates are computed and how the collateralization works as well. And how liquidations work, I guess. So kind of a deep question there, but we could just start at the first.

Teddy (12:12):

Yeah, for sure, man. So I guess I would start by saying the core concept here is what we call Fcash. So Fcash tokens are tokens that you can transfer and trade and they are like zero coupon bonds in that they’re defined by a currency type and a maturity date. So for example, April 2nd, 2021. Dye tokens are Fcash tokens. Now the thing that’s special about those, is that upon April 2nd, 2021, I can redeem one, April 2nd, 2021 dye token for one die on Notional. Okay. So you can think about Fcash as representing cash at a specific date in the future. So April 2nd, 2021 dye, represents dye on April 2nd, 2021. Okay.

Teddy (13:14):

And the way we achieve borrowing and lending fixed is by allowing you to trade between dye today and dye in the future on our protocol liquidity pools. And so these are unit swap like pools where you have dye on the one side, April 2nd, 2021 dye on the other side, and as people borrow and lend the proportion changes and the interest rate changes as well. So just like a quick example, if you were a lender, what you’re going to do is you’re going to take your dye, place your dye into the pool and take out April 2nd, 2021 dye, right? And the exchange rate at which you make that trade, implies a fixed interest rate over that period of time. Does that make sense?

Tom (14:04):

That’s a great explanation. No, it definitely makes sense. I mean, you’re basically getting… You give 100 dye you’re getting less than 100 dye in Fcash. And as you approach the maturity date you get back to your $1 fix and the difference imputes your interest rate. Is this all done in one pool for the different maturities or is this many pools or how does that work?

Teddy (14:26):

Yeah. So each maturity has its own pool.

Tom (14:31):

Got it. Okay. That’s pretty cool. That’s awesome. And I guess my other question there like, is there any thoughts on like fragmentation if you have a bunch of pools and stuff like that, or is that not really an issue for institutions? If you have like set maturity dates every three or six months or something like that?

Teddy (14:47):

Yeah. So, okay. So this is an interesting thing. So fragmentation is absolutely an issue and it’s one of the reasons why you can’t have a liquidity pool every single day for six months, right? That’s not going to work. Essentially right now we are giving some menu of options, right? So you have two options at three month and six month. Now we will probably add in a one-year maturity as well. But every maturity that you add does increase the fragmentation of liquidity, so you have to be judicious, right? You don’t want to add too many maturities, and so if you have to balance around giving people choice versus fragmenting liquidity, and there’s no mathematical answer that you can prove that this is the best thing to do, it’s really just empirical as the protocol progresses.

Teddy (15:46):

But an interesting thing that we’re actually rolling out in V2, is the ability to trade dated Fcash, So basically it’s kind of an interesting thing, but you’ll be able to trade to any idiosyncratic date and without having to fragment liquidity. So that’s really interesting. We haven’t totally figured out exactly how we’re going to do this, but I know we’re going to do it for V2. So stay tuned.

Tom (16:18):

No, this is awesome. And Jeff, I promise I’m a common class, right, don’t worry. But one more for you Teddy. On the collateralization aspect, how exactly does that work? I mean, you could put up ether Bitcoin or Rapid Coin, which is awesome. bringing Bitcoin also to DeFi is awesome, but how exactly does that work? Like I see the slider, I can go low, medium, or high risk. Like what exactly does that imply on getting liquidated?

Teddy (16:44):

Right. Okay. So the collateralization framework, the simple way to explain it is that it works a lot like Compact, as does liquidation. So right now our collateralization ratios are 140% and we’ve set that conservatively. I think we can get that down, but right now it’s 140%, and what that means is that you need $140 worth of collateral to borrow $100, right? So if you were going to deposit ether to borrow dye, for example, you’d need to… If you had $1,400 worth of ether on the platform, you could borrow up to $1000 worth of dye. So in that sense, it works just like Compound or Ave, and the liquidation also works similar to Compound or Ave, so when you fall under collateralized, a liquidator has the opportunity to buy a portion of your ether collateral at a discount to the chain link price. And by doing that, the liquidator brings your account back to healthy collateralization levels by essentially repaying some of your debt on your bed.

Tom (18:08):

That’s awesome. That’s a great explanation. Teddy you got the pitch down. And Jeff, a couple of questions for you here. How does all of this work or what are the concerns like on the Dev or smart contract side? Like, do you run into normal issues with, if gas costs get too high, we can’t get liquidations or what are the technical hurdles in helping to code up Notional and what were the, I guess, biggest achievements that you’ve seen from the team?

Jeff (18:35):

Yeah. So I think all of this normal smart contract concerns apply here. I would say coding Notional like from the smart contract perspective, I think the way we’ve like built Notional is the first thing that we want to do is make sure that all the users in the system got the most capital efficiency that we could possibly get them. Right? And so there’s a lot of things that come into play there that are sort of passed in the weeds a little bit of how the protocol works, but provide a lot of efficiency gains. Right? And this is a lot of what Teddy has been really been driving over the last year as we’ve been developing this. So one example is when you provide liquidity in Notional, you provide it on leverage. Right? And I think Teddy can give a better explanation of what that means in terms of efficiency benefits there, but when you’re providing on leverage, we also like account for all your positions in a portfolio. Right?

Jeff (19:48):

So we make sure that if you’re lending in one currency, it gives some collateral benefit to another currency and just tracking all those kinds of debts and entitlements in the right way and making sure that they’re netting off properly, that was like the big challenge around building Notional and smart contract system. And also I think there’s a little bit of a story. I think our auditors have found an issue that was sort of like seems very innocuous to them with like some sort of the liquidation mechanism that was like… They thought like, oh, this is weird, but maybe like a low priority issue and Teddy and I, tagged as a threat a little bit and like all of a sudden liquidation code went from like 300 lines to like 1300 lines threat.

Jeff (20:44):

Teddy is like, think of them like, that was a fun couple of days. But I think probably actually the thing… Not only the smart contracts, but I’m really proud of is the website. I think you mentioned like, it’s really nice, it’s really easy to use. We’ve worked with a design firm here in San Francisco. I felt like that was very important because I’ve used DeFi protocols before and I’ve just found that, it takes a big leap of faith to submit in a theme transaction to like something you know it’s sort of irrevocable. And I just felt like a system with all the little moving bits inside of it to achieve the fixed rate like ours, I think we wanted to really make sure that we could expose as much information and feedback to the user, to give them like a good mental model of like what’s going to happen to their money. Right?

Jeff (21:44):

And I still think like from our user interviews we know that there’s still this trust gap that we need to close and maybe that just takes time and familiarity, but I am really proud of the way designers like made the website easy to use and understandable and presentable, because I think that hopefully will go a long way to making people comfortable with the platform. Yeah.

Tom (22:05):

Yeah, no. Congratulations on the site. If I’m here for 30 seconds, I know exactly how to lend, borrow, provide liquidity. It’s super simple. And when I click into lending or borrowing, it’s really easy, so kudos to you guys. And that’s totally what you want, which is great. I’m sure it wasn’t easy though.

Teddy (22:24):

Yeah. And I would actually just jump in real quick here. So Jeff has like written every single line of the smart contracts. And I think he’s not a guy that’s going to go brag a bunch, but I think that I will say for you, obviously I’m not the technical expert, but I do know that like our last audit, they found zero exploits and this is a sophisticated system and Jeff wrote the whole thing and I think it’s pretty impressive.

Tom (23:02):

Jesus, Jeff, that is impressive, man. Come on, man. You’re on a podcast once you’re allowed to brag a little bit.

Jeff (23:07):

All right. Yeah, yeah. I did a great job. No, I did. It can get better. And I think we’re always looking for ways to improve this thing and I think, yeah, I don’t really like to pat myself on the back too much. I think we can always do better here. For sure.

Tom (23:28):

All right, that’s good mentality. So guys we went through Notional, how it works, your stories, let’s zoom back out for the second half of the pod. Let’s talk about like how Notional affects DeFi, like what are fixed rates offer for DeFi that we don’t have today? Like what use cases, what clients, what markets, what apps, like what are you guys going to be the building blocks for within DeFi?

Teddy (23:57):

Yeah, I think that’s a good question. So I guess what I would say is that if you want to zoom out and say what broadly fixed rates enable, I think in a broad sense, it brings mainstream users into DeFi. That’s what I would say. It’s a pretty important building block that I think brings DeFi, I guess, allows DeFi to capture use cases that aren’t exclusively focused on trading and speculation. I think that, that’s quite important and that’s like a really big step into making like DeFi a, well, yeah, a real financial system that is capable of catering to a more mainstream user. Right? And if we want DeFi to succeed that just has to be true. And we have to be able to do that. Because there’s only a very small minority of people in the entire world that are going to be participating on these protocols and like actively yield farming and just like really getting into the weeds and reading the code, I mean, that is a very small minority of people operations.

Teddy (25:16):

So in order for a DeFi to succeed and move past where it is today, we need to be able to meet more mainstream users where they are and fixed rates I think, are a critical piece of doing that. So maybe like tangibly I think that we could see a future where fixed rates cater to businesses, so minors and businesses. So if you’re a minor today, you might want to borrow against your Crypto instead of selling your Crypto to invest in your hardware. And if you want to borrow on a term, that’s like… If you want to borrow a year, a couple of years, using borrowing rates that can spike to 70%, I mean, it’s just a non-starter, right? And like, I just think that-

Tom (26:12):

Yeah. No. That’s a.

Teddy (26:15):

The longer that you borrow for the more important fixed rates become, right? Because the volatility of variable borrowing rates just compounds the further out you go. And so if we can like facilitate people borrowing for six months, a year, five years, I mean, we can really start to match the capabilities of the traditional financial system. We could see Crypto projects instead of having to sell down their treasury to finance their protocol operations, they can borrow against it. Right? And they would do that if they were confident that the price appreciation on their treasury holdings would be greater than the interest rate they will pay on their loan. Right? That’s something that traditional businesses do. Right? So I think that’s exciting. It like opens up, I would say, yeah, just a more mainstream class of use cases for DeFi.

Tom (27:16):

Teddy do you think that… I mean, in my mind, you guys are most well positioned to attract the institutional crowd. And I’m sure a million people have said that I’ve done a million projects, but you guys are offering like a traditional product at the clean UI, to traditional investors. Do you think that you guys will attract… I don’t know what the traditional target market here is. Maybe it’s large macro funds that hold a lot of Bitcoin, do you think that you’ll attract those types of clients anytime soon? Or do you think that’s a little further out?

Teddy (27:45):

Yeah, that’s a good question. So we’re currently in conversations with those guys and we just kicked those off. I think they’re absolutely interested. And I think that that is business that we will capture in the future. I still think that ultimately they aren’t going to be our first users, right? Because we’re still like a new DeFi protocol and this stuff is all a little weird to institutions still. Right? And so we our first users are going to be people that are more comfortable and actively participating in DeFi today.

Tom (28:29):

Awesome. That makes a lot of sense. I’m sure there’s a lot of weird niche like DeFi products that can be built using fixed rates that we’re not thinking of right now, just on the fly, but I mean, there’s just so much use case and speculation on apps and DeFi on different apps. Like, I’d be surprised if you guys weren’t integrated into one of these projects just to make it simple for users.

Teddy (28:51):

Yeah. I think you’re absolutely right. I mean, we really look forward to… I mean, that’s one of the great things about DeFi, is the community participation and the way that somebody else, who’s not a part of the team that we don’t know at all can just take what we’re doing and build something really cool with it. So we’re really excited to see what people do.

Tom (29:13):

Yeah. No same here. And I guess what’s on the roadmap for you guys? I mean, you you have the site up, you guys are launching, which is a huge feet in itself, but I guess what are you guys looking to add? What are you looking to build next? What’s on the roadmap?

Teddy (29:28):

Yeah. So I would say that the roadmap ahead here is… The first step is growing Notional, growing our liquidity, growing our underlying lending and borrowing usage and just raising awareness about what we have to offer. And then from a development standpoint, I mentioned that we’re working on a V2. Now, there are some features that we can talk about a little bit others that we can’t, but yeah, there’s definitely going to be interesting stuff coming in V2. And one of those things is like, I think we can definitely talk about is our ambition to extend the maturity days. So that like you can actually borrow and lend for a year or two years at a time. Ultimately, I think our V2 is going to have the capability to have you borrow and lend for up to 10 years. Now we don’t anticipate doing that right away, but that’s where we want to get to. Right? And so, yeah, like extending the available maturities for users, is definitely something that we’re looking forward to in the future.

Tom (30:51):

That’s awesome. And one thing I missed when we were talking earlier about the collateralization ratio is like, I know you said 140% for you guys, it gets confusing when comparing to other platforms because some use like liquidity thresholds and maximum LTVs and things like that, but how do you guys compare on the collateralization ratio for like ease to compound RAVI? Like, do you borrow more against it? Do you guys will have a higher, lower liquidity threshold, like how exactly does that play out?

Teddy (31:17):

Yeah. So I think we are roughly comparable to compound. Now, are they? I’m not entirely sure, but I believe we are roughly comparable to compound. Although what I would say on that note, Tom, is that we are also currently working with Gauntlett to optimize our systemic risk parameters. Now we launched with this 140% to be conservative, but I do believe that we’re going to be able to get that down significantly. So I think that once we have a little bit more confidence that our liquidator ecosystem is healthy, I think that we should be able to get down to something like 120% collateralization. Which would be better than compound and would rival the OTC market. So I think that that’s going to be significant. Yeah.

Tom (32:10):

Yeah, no, that makes a lot of sense. One thing we didn’t talk about, we talked about lending, we talked about borrowing, you guys offer users the option to provide liquidity. What does that mean?

Teddy (32:21):

Right? So I think this is like one of the more difficult things for people to get about Notional because you have this… When you think about lending products in DeFi, generally you have this mental model in your head where there’s borrowers and there’s lenders and that’s it. Right? And in our protocol, there’s this third user type, the liquidity provider, which people can commonly conflate with lenders, but they’re actually two different people. So what I would say, the way to understand this is that our liquidity pools are not like compound liquidity pools, they’re like unit swap liquidity pools. Okay. So the lender is the buyer of Fcash, the borrower is the seller of Fcash and liquidity provider on Notional does the same thing as the liquidity provider on unit swap. So the LP just puts capital into the pools and earns trading fees every time a lender lends and a borrower borrows.

Tom (33:29):

Got it. Okay. That makes sense. This is awesome guys. No, we covered a lot. It’s great that you guys built this and launched it. I’m pretty excited. Is there anything that we missed that we forgot to cover today? I feel like we hit on a lot.

Teddy (33:44):

Yeah. I mean, I think that’s pretty good. I guess, all I’d say is just to hammer it home again, right now on Notional, you can borrow up to 300K USDC, less than 5% interest rates. And if anyone wants to try the product, you can visit our website,, or hop on our discord and talk to us.

Tom (34:10):

Teddy? I wish I had the collateral to do that right now and I would take it out, but a little low. It’s all today. But it’s exciting. And guys, what about the broader team? Is it just you guys right now? Or are you guys building up or how’s that looking?

Teddy (34:26):

Jeff? Why don’t you take that one?

Jeff (34:30):

Yeah. So it’s two of us for now. We have some help on the website front. So like I mentioned, we have a design from design firm that we work with as well as a really great web developer that has just done a lot of the lifts for like the visual stuff and just making it super responsive. I think we’re adding more on the business side, so like Teddy mentioned, we’re really trying to get awareness out there, and I think there’s just a lot of code calling. You can call it in DeFi to try to get people on the platform and using it. So I really think for the next few months here, it’s going to be a lot of focus on just driving usage, driving adoption and the marketing effort.

Tom (35:17):

That’s pretty cool. And the other thing though, like every DeFi project has to create a community, they need to be on discord all the time, adding new products, yada, yada, yada. And it’s exhausting, obviously for them, you guys really don’t need a community to win. Right? You guys just need to give the best rates and have a lot of liquidity, right? Like you don’t technically need Notional army per say, do you?

Teddy (35:43):

Well, it would certainly be nice. I’ll tell you that.

Tom (35:48):


Teddy (35:49):

That’s a good question. I think that we very much intend. In sort of design decisions that we’ve made, we’re prioritizing the economics of the system so it’s going to be the most efficient for LP capital. It’s going to be the most efficient for borrowers. And part of that is the best rates, the least slippage. And so we’ve sort of designed for that, and I think if we can win there, we should be able to, I mean, ultimately I think we should be able to win by winning on those qualities. But at the same time, I don’t want to like diminish the importance of community at all. I think that ultimately it’s risky trying a new DeFi protocol and I think it’s important for people to feel that they’re part of the team and they’re part of something. And that’s what gets a lot of people over the line.

Teddy (36:54):

And so I think that it’s extremely important, yeah, that people feel that they’re part of a Notional community. And so, yeah. I guess I would say, I just don’t want to diminish the importance of that. And also people have really good ideas. So like people in the discord are raising interesting questions about design decisions that we’ve made and it’s really helpful. Yeah.

Tom (37:25):

Yeah, no, I totally agree with you. Community is extremely important. I just think it’s good for you guys that you don’t need like a million people to help you guys be successful. And one of my last questions for you, Teddy, Jeff, how do you guys make money here? Like, are you earning a part of the spread? Are there fees involved? How exactly does that model work to make sure that you guys have the resources to build this out for years to come?

Teddy (37:49):

Yeah. So what I can say is that we do not currently take a transaction fee, but that is a thing that could happen in the future. And that to fund the reserves for the protocol. So anytime someone loans or borrows, we could theoretically take a small fee. Yeah. But we do not currently do that.

Tom (38:14):

Awesome. All right, cool. And for those who want to try the platform, what’s the website address and how could they follow you guys and learn more and stay in touch.

Teddy (38:23):

Yeah. So, it’s is the website and you can follow us on Twitter. Our handle is @notionalfinance.

Tom (38:34):

That’s awesome. Well, thanks so much for coming on, on such short notice and you guys are swamp launching this. This is awesome. I mean, I haven’t heard fixed rate lending yet. You guys are the first guests on the topic. So really great to have you guys on congrats on the launch and for everyone listening, all the links that Teddy and Jeff mentioned will be in the show notes. Thanks so much guys.

Jeff (38:54):

All right. Thanks a lot Tom.

Teddy (38:55):

Thanks for having us, Tom. Yeah.