Credit · Fixed Income · NOTE
Notional provides fixed-rate, fixed-term lending and borrowing via fCash: tokenized claims on a fixed amount of an asset at a future maturity, traded on an on-chain AMM.
Fixed-rate, fixed-term lending and borrowing.
NOTE price
$0.0055
+0.2% 24h
Latest data · 15 min delay
Notional built fixed-rate, fixed-term lending and borrowing on Ethereum using , a token representing a fixed amount of an asset at a fixed future date. A lender swaps cash for fCash at a rate set by the pool: 100 USDC lent for six months at 5 percent yields fCash of 100 × e^(0.05×0.5) = 102.53, and a borrower mints an offsetting positive and negative fCash pair against collateral (Notional docs, using fCash). V3 removed the hard cliff at maturity by auto-converting matured fixed-rate debt into variable-rate debt, which allowed penalty-free rolls (Introducing Notional V3). This entity is not in steady state. Notional V3 is winding down: the team announced on 19 June 2025 that it would gradually withdraw support, and in November 2025 V3 was announced to cease operations on mainnet and Arbitrum following bad debt from a Balancer vulnerability (Introducing Notional Exponent, KuCoin news wire). The successor product, Notional Exponent, a leveraged yield vault protocol built on Morpho borrow liquidity, went live on 26 January 2026 (Notional Exponent launch details, Notional Exponent docs).
True fixed-rate/fixed-term loans through fCash, rather than variable money-market rates, giving predictable cost of capital for borrowers and lenders.
Notional's core product. fCash is an ERC-1155 token representing a claim to a fixed amount of an underlying asset at a specific future maturity. Lenders buy positive fCash at a discount and redeem it 1:1 at maturity for a fixed return; borrowers mint negative fCash to receive cash today and repay a fixed amount later. fCash trades against Prime Cash in maturity-specific AMM liquidity pools where the ratio of Prime Cash to fCash sets the fixed interest rate. This is how Notional delivers fixed-rate, fixed-term lending and borrowing on-chain.
Introduced in V3, the prime money market lets users lend and borrow at variable rates, integrating with the fixed-rate markets. Deposits are represented as Prime Cash. Fixed-rate debt automatically converts to variable-rate debt at maturity with no settlement penalty, and variable positions serve as the underlying liquidity that fixed-rate pools trade against.
Whitelisted external smart contracts that execute pre-approved yield strategies (e.g. Curve, Balancer, Uniswap LP or staking strategies) funded by fixed- or variable-rate borrowing from Notional. A user deposits collateral, borrows against it, and the combined capital is deployed into the vault; vault assets are recognized as collateral against the debt, enabling leveraged (up to ~10x on some strategies) exposure while paying interest only on the borrowed portion. Positions are overcollateralized and subject to liquidation.
NOTE is the ERC-20 governance token of the Notional protocol. Holders propose, vote on, and implement changes to system parameters and smart contracts (one vote per NOTE) via Notional Improvement Proposals through on-chain governance. NOTE is also used to incentivize liquidity providers and, historically, could be staked (sNOTE) to backstop the protocol.
Founded January 2020 by Teddy Woodward and Jeff Wu at a San Francisco hackathon; V2 launched 1 Nov 2021
Messari reportNotional V3 winding down; successor Notional Exponent went live 26 January 2026 and is described as live in the 29 January 2026 post
Notional Exponent launch details"Notional Finance" is the named entity on the governance forum terms; no incorporated labs entity name confirmed: `n.a.`
Notional forum terms`n.a.` (not stated in any fetched source)
Notional forum termsNOTE, supply 100,000,000
Messari reportDiscourse forum at https://forum.notional.finance plus "Notional Snapshot" voting by NOTE holders on Mainnet and Arbitrum, quorum 1,000,000 NOTE, simple majority. Exact Snapshot space URL: `n.a.`
Notional forum termsV3: Ethereum and Arbitrum. Exponent: Ethereum
DefiLlama NotionalNotional V3 $3.58m as of 26 Jul 2026 (Ethereum $3.58m, Arbitrum $794); Notional Exponent $483,689 on Ethereum
DefiLlama NotionalSherlock (Notional V3, completed 1 May 2023; External Lending, 1 June 2024), Code4rena (wrapped fCash, 16 July 2022), and for Exponent both Sherlock and Mixbytes
Immunefi Notional Exponent$250,000 Immunefi programme for Notional Exponent, live since 16 January 2026
Notional Exponent launch detailshttps://docs.notional.finance and https://docs.notional.finance/exponent
Notional Exponent docshttps://github.com/notional-finance, 20 repositories
GitHub Notional FinanceClosest analogue
the fixed-rate term loan and the zero-coupon discount note, priced off a term structure. is the discount note.
Instrument shape
Notional Finance
is a claim on a fixed amount at a fixed future date; 100 USDC at 5 percent for six months mints 102.53 fCash
TradFi analogue
Zero-coupon discount note or term deposit priced by continuous compounding
Underwriting
Notional Finance
None per borrower. Borrowing is done by minting an offsetting pair against posted collateral
TradFi analogue
Secured margin loan rather than credit underwritten term debt
Collateral
Notional Finance
onchain collateral; V3 added external lending of idle collateral
TradFi analogue
Repo style collateral with
Rate setting
Notional Finance
Pool-determined exchange rate across fixed tenors of 3 months, 6 months, 1, 2, 5, 10 and 20 years
TradFi analogue
A dealer-quoted term structure across standard maturities
Settlement
Notional Finance
At maturity fixed-rate debt auto-converts into variable-rate debt rather than defaulting, enabling penalty-free rolls
TradFi analogue
Rollover of a maturing term loan into an overnight facility
Recourse on default
Notional Finance
Liquidation of collateral. In November 2025 protocol-level bad debt of 641.4 ETH on mainnet plus 80.2 ETH on Arbitrum was socialised, and Balancer and Aura leveraged vault holders lost 100 percent
TradFi analogue
Loss given default borne by the lender pool, with no external guarantor
Regulation
Notional Finance
No securities registration or investor gate disclosed; governance is a NOTE holder Snapshot vote with a 1,000,000 NOTE quorum
TradFi analogue
Unregulated relative to a bank term deposit or a registered note programme
Series A
29 Apr 2021$10m
Total raised per DefiLlama: $10m (DefiLlama Notional).
Key milestones: launches, upgrades, exploits and governance events.
Founded by Teddy Woodward and Jeff Wu at a San Francisco hackathon
StatedOrigin of the protocol
Source$10m Series A led by Pantera Capital
StatedOnly institutional priced round on record
SourceV2 launches with fixed tenors of 3m, 6m, 1y, 2y, 5y, 10y and 20y
StatedEstablishes the full fixed-rate term structure
SourceCode4rena audit of wrapped fCash completed
StatedSecurity process around the composable fCash wrapper
SourceSherlock audit of V3 begins, running seven weeks, with mainnet targeted for early June 2023
StatedV3 development milestone
SourceSherlock audit of External Lending completed
StatedIdle collateral deployment feature audited
SourceExponent announced. "Notional V3 will continue running indefinitely but the Notional team will gradually withdraw support", with NOTE liquidity incentives going to zero by end of 2025
StatedFormal start of the V3 wind-down
SourceV3 announced to cease operations on mainnet and Arbitrum after bad debt of 641.4 ETH on mainnet and 80.2 ETH on Arbitrum from a Balancer vulnerability; Balancer and Aura leveraged vault holders lose 100 percent; cross-asset lending positions auto-migrated to Aave
StatedThe wind-down becomes a forced closure with realised losses
SourceImmunefi bug bounty for Notional Exponent goes live
StatedSecurity programme in place ahead of launch
SourceNotional Exponent goes live with two USDC vaults, mHYPER and mAPOLLO, issued via Midas, audited by Sherlock and Mixbytes, a $250,000 Immunefi bounty and 100,000 NOTE of incentives over six weeks
StatedSuccessor product launch
SourceExponent confirmed live with mAPOLLO as the first vault, Clearstar as Morpho curator and mHYPER with Hyperithm to follow
StatedFirst live vault
SourceNo, not as a going concern. On 19 June 2025 the team said V3 would keep running but that it would "gradually withdraw support" and zero out NOTE liquidity incentives by the end of 2025 (Introducing Notional Exponent). In November 2025 V3 was announced to cease operations on mainnet and Arbitrum, with cross-asset lending positions auto-migrated to Aave (KuCoin news wire). DefiLlama shows only $3.58m of residual TVL as of 26 July 2026 (DefiLlama Notional).
A Balancer vulnerability. Notional V3 carried bad debt of 641.4 ETH on mainnet plus 80.2 ETH on Arbitrum, and holders of the Balancer and Aura leveraged vaults lost 100 percent of their positions (KuCoin news wire). One report puts the total loss at over 721 ETH (AInvest).
No. Exponent is "a leveraged yield protocol that enables users to maximize returns on DeFi yield strategies with leverage", built on top of external lending markets such as Morpho to source borrow liquidity for looping (Notional Exponent docs). It is a leveraged yield vault business, not fixed-rate term lending, so the fixed income primitive itself did not survive the transition.
Small. DefiLlama shows $483,689 of TVL on Ethereum for Notional Exponent as of 26 July 2026, against peers such as Yield Basis at $121.71m and Homora V2 at $110.27m (DefiLlama Notional Exponent).
As a discount note. Lending 100 USDC for six months at 5 percent mints of 100 × e^(0.05×0.5) = 102.53, so the rate is embedded in the exchange rate between cash and fCash (Notional docs, using fCash). Borrowers minted an offsetting positive and negative fCash pair against collateral.
NOTE remains the governance token, voted through the "Notional Snapshot" by holders on Mainnet and Arbitrum, with a quorum currently set at 1,000,000 NOTE and a simple majority pass rule (Notional docs, Snapshot voting). NOTE was also used for the 100,000 NOTE incentive programme at the Exponent launch (Notional Exponent launch details).
Yes, and they are unrelated. The Solana protocol Exponent Finance is a separate company and should not be confused with Notional Exponent, which is documented at docs.notional.finance/exponent (Notional Exponent docs).
Bull case
The successor product launched with institutional-grade process: two USDC vaults with named external strategists (Hyperithm and Apollo Crypto), audits by Sherlock and Mixbytes, a $250,000 Immunefi bounty and Hypernative monitoring (Notional Exponent launch details).
Notional Exponent launch detailsThe team retains a long security record, including Sherlock audits completed 1 May 2023 and 1 June 2024 and a Code4rena review on 16 July 2022 (Immunefi Notional Exponent).
Immunefi Notional ExponentExponent leverages Morpho rather than rebuilding a lending market, which lowers the capital needed to reach scale, and the first vault shipped with Clearstar as curator within three days of launch (Notional Exponent is Live).
Notional Exponent is LiveThe V3 wind-down was executed with user migration rather than abandonment, with cross-asset lending positions auto-migrated to Aave (KuCoin news wire).
KuCoin news wireBear case
**Current status: the original fixed income protocol is closing.** V3 was announced to cease operations on mainnet and Arbitrum in November 2025, and residual TVL is $3.58m as of 26 July 2026 versus a business that once offered tenors out to 20 years (KuCoin news wire, DefiLlama Notional, Messari report).
KuCoin news wireUsers took real, uninsured losses: 641.4 ETH of bad debt on mainnet plus 80.2 ETH on Arbitrum, and 100 percent loss for Balancer and Aura leveraged vault holders (KuCoin news wire).
KuCoin news wireThe successor is subscale at $483,689 of TVL as of 26 July 2026, orders of magnitude behind the leveraged yield peers DefiLlama lists alongside it (DefiLlama Notional Exponent).
DefiLlama Notional ExponentThe pivot abandons the fixed income category entirely. Exponent is described as a leveraged yield protocol built on Morpho borrow liquidity, not a fixed-rate term lending market (Notional Exponent docs).
Notional Exponent docsExternal publications on this protocol: risk assessments, analyst reports, audits and post mortems.
Founding history, V2 launch on 1 Nov 2021, 100,000,000 NOTE supply and the 3m to 20y tenor ladder (older source, pre-V3)
Consolidated audit history including Sherlock V3 (1 May 2023), Code4rena wrapped fCash (16 Jul 2022) and External Lending (1 Jun 2024)
Quantifies the terminal bad debt at 641.4 ETH on mainnet and 80.2 ETH on Arbitrum from a Balancer vulnerability
Independent confirmation of an aggregate loss of over 721 ETH
Shows the NIP plus Snapshot process through which emissions were cut ahead of the wind-down
Academic treatment of the arbitrary-maturity AMM problem that fCash pools solved with discrete tenors
Residual TVL of $3.58m and the $10m Series A record
Successor product TVL of $483,689 on Ethereum with leveraged yield peers for comparison
