DeFi Startup Notional Expands Fixed-Rate Lending Presence With V2 Upgrade

The crypto lending protocol’s second iteration brings an improved focus on security and liquidity.

AccessTimeIconNov 1, 2021 at 4:00 p.m. UTC
Updated May 11, 2023 at 6:02 p.m. UTC

Fixed-rate cryptocurrency lending startup Notional is growing its decentralized finance (DeFi) presence with the launch of its V2 upgrade, the company announced Monday.

The company, which offers fixed-rate debt using an on-chain automated market maker (AMM), said the new iteration of its platform has improved security and liquidity, following a $10 million Series A funding round in April led by Pantera Capital.

The protocol currently offers fixed-rate borrowing of USD coin (USDC) and DAI for up to one year, and wrapped bitcoin (wBTC) and ether (ETH) borrowing for up to six months. It has received three independent audits from ABDK Consulting, Certora and Code Arena, according to a press release.

The company issues its own NOTE token (nToken) that qualifies as collateral on the platform, which users can borrow against without giving up any of their returns. The company says that 50% of the total nToken supply will be used to incentivize liquidity providers, with 20% to be distributed in the first year.

The company said it plans on front-loading incentive distribution to reward early liquidity providers, who can deposit DAI, USDC, ETH and wBTC to earn interest, liquidity fees and NOTE incentives.

NToken holders also receive governance perks that let them propose and vote on changes to Notional’s system parameters and the Notional smart contract.

The company said it plans to implement a layer 2 solution in future versions of the platform in addition to increasing utility and governance for NOTE holders.

“Notional V2 brings the values of transparency, openness and efficiency to the $100 trillion fixed income market,” Notional CEO Teddy Woodward told CoinDesk. “We are extremely excited to kick off the next chapter of DeFi’s growth by enabling liquid fixed income products on Ethereum.”

The lending protocol’s V2 comes a year after launching out of stealth in October 2020 after raising $1.3 million from Coinbase Ventures, 1Confirmation and Polychain.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Eli is a news reporter for CoinDesk. He holds ETH, SOL and AVAX.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.

Read more about