Notional Finance
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.
Protocol TVL
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Risks identified
- Collateral
All borrowing and leveraged-vault positions are overcollateralized in volatile crypto assets (ETH, wstETH, cbETH, wBTC, ARB, etc.). A sharp drop in collateral value can push a position below its required collateralization ratio and trigger liquidation, causing loss to the borrower.
- Smart Contract
Notional relies on complex custom contracts (fCash ERC-1155 accounting, maturity-specific AMM pools, external leveraged vaults). Despite 17+ audits, bugs in these contracts or in the whitelisted vault strategy code could lead to loss of funds.
- Oracle
Collateral valuation and liquidation for borrowers and leveraged vaults depend on price oracles. Manipulated, stale, or inaccurate oracle prices could cause faulty liquidations or allow undercollateralized borrowing.
- Counterparty
Leveraged vaults deploy borrowed capital into external protocols (e.g. Curve, Balancer, Uniswap, liquid-staking tokens). A failure, exploit, or depeg in one of those external strategy protocols would directly impair vault positions and the loans backing them.
- Governance
Protocol parameters, collateral listings, vault whitelisting and contract upgrades are controlled by NOTE-token governance. Concentrated NOTE holdings or a malicious/erroneous proposal could change risk parameters or upgrade contracts in ways that harm users.