Fixed-rate lending startup Notional is increasing its presence in DeFi with the launch of its V2 upgrade, the company said on Monday. The platform offers fixed rate debt using an automated on-chain market maker (AMM).
The company said the new iteration of its platform comes with an increased focus on security and liquidity, following a $ 10 million Series A raised in April led by Pantera Capital.
The protocol currently offers fixed rate USDC and DAI borrowings for up to one year, and wBTC and ETH borrowings 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) which is considered a collateral on the platform, against which users can borrow without giving up any of their returns. The company claims that 50% of the total supply of nToken will be used to incentivize liquidity providers, with 20% to be distributed in the first year.
The company said it plans to set up an 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 benefits that allow them to propose and vote on changes to Notional’s system settings and Notional’s 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 $ 100,000 billion fixed income market,” Notional CEO Teddy Woodward told CoinDesk. “We are extremely excited to launch the next chapter in DeFi’s growth by enabling liquid fixed income products on Ethereum.”
The V2 of the loan protocol arrives a year later stealth launch in October 2020 after raising $ 1.3 million from Coinbase Ventures, 1Confirmation and Polychain.