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
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Typed risks scored by severity, likelihood and impact, with the incident record behind them.
Notional V3 is winding down; the successor product Notional Exponent went live on 26 January 2026.
42
severity-weighted points across 14 typed risks · 4 critical
assessed Jan 2026Market
14· 5 risks · 1 critical
Technological
12· 4 risks · 1 critical
Counterparty
7· 2 risks · 1 critical
Governance
9· 3 risks · 1 critical
Regulatory
No rowsNo Regulatory risk rows in the dataset: a recorded finding (no fetchable regulatory exposure source), not missing data.
Every score is recomputed at render time from the typed risks below; nothing is hand-assigned. Each risk contributes its severity weight (critical 4 · high 3 · medium 2 · low 1) to its category; the headline number is the sum across all categories. Bars scale to this entity's highest category score. Scores are not comparable across tags because a permissionless-market protocol concentrates technological risk while an institutional-credit protocol concentrates counterparty and regulatory risk, and a single league table would misrepresent both.
Market 5 × → 14
Technological 4 × → 12
Counterparty 2 × → 7
Governance 3 × → 9
Notional's failure mode was composability, not its own code. Its lending and machinery worked as designed, but its leveraged vaults had deposited user capital into Balancer V2, and when Balancer was exploited in November 2025 the loss travelled straight through: vault holders lost everything, the protocol's reserves proved to be a rounding error against the damage, and mainnet ETH lenders were haircut more than 56%. That is the important lesson, because it shows that in Notional's design the lenders, not an insurance fund, are the ultimate backstop. Rather than recapitalise, the team wound V3 down on both chains and migrated borrowers out to Aave. The successor, Notional Exponent, launched in January 2026 with Sherlock and MixBytes audits, a 250 thousand USD Immunefi bounty and Hypernative monitoring, but it is a new codebase with thin launch liquidity that again depends on external curators and strategy providers. Anyone underwriting Exponent is underwriting the same composability question with better monitoring and no track record yet.
Market5
Technological4
Counterparty2
Governance3
2 documented incidents · Nov 2025 to 3 Nov 2025 · how the protocol behaved under stress, with sources.
Nov 2025
Following the Balancer losses Notional closed remaining vault positions, migrated cross currency borrowers to Aave using individually deployed Gnosis Safes, and made full distributions.
DetailsFollowing the Balancer losses Notional closed remaining vault positions, migrated cross currency borrowers to Aave using individually deployed Gnosis Safes, and made full distributions.
Outcome: Notional V3 was wound down on both Ethereum mainnet and Arbitrum. Notional Exponent later launched as the successor protocol on 26 January 2026.
Source3 Nov 2025
The Balancer V2 hack, detected by Notional at 2:52 AM ET, drained the Balancer pools underpinning five Notional leveraged vaults: rETH/WETH, wstETH/WETH and rsETH/WETH on Arbitrum, and ezETH/WETH and rsETH/WETH on mainnet.
DetailsThe Balancer V2 hack, detected by Notional at 2:52 AM ET, drained the Balancer pools underpinning five Notional leveraged vaults: rETH/WETH, wstETH/WETH and rsETH/WETH on Arbitrum, and ezETH/WETH and rsETH/WETH on mainnet.
Outcome: Vault holders lost 100% of their positions. Protocol reserves of roughly 100 thousand USD on mainnet and 18 thousand USD on Arbitrum were written to zero, plus about 205 thousand USD and 161,450 USD of non ETH reserves converted to ETH. ETH lenders were then haircut 56.019% on mainnet and 19.244% on Arbitrum.
SourceEvent-type chips are categorised by event type against the risk taxonomy (a documented presentation mapping, not a dataset assessment). Amounts are the dataset's published figures; missing values were never published.
