Notional Launches Out of Stealth to Bring Fixed-Rate Lending to DeFi
Summary
The startup also announced Monday a $1.3 million funding round from a total of eight investors, including Coinbase Ventures, 1confirmation and Polychain. Notional enables fixed-rate debt on Ethereum using a new on-chain automated market maker (AMM) that can be used by DeFi, CeFi and institutional traders, the startup said in a statement. “Today, DeFi is a jungle full of high net-worth speculators, self-identified degenerates and meme chasers,” said co-founder Teddy Woodward. “With Notional, you can take advantage of volatility instead of getting hurt by it.” To accomplish that, Notional lets DeFi traders lock in borrowing rates on dai (DAI) to finance yield farming activities for up to six months, all while accessing fixed rates on levered long ether (ETH) trades for the same amount of time using a token called fCash. Investor Nick Tomaino, founder of 1confirmation, told CoinDesk in an email, “We’re excited about bringing fixed-rate loans to people in a current Ethereum lending environment where variable-rate loans dominate.” “The ability to lend and borrow at fixed rates is going to open up a brand new dimension, or financial design space, for DeFi and Ethereum’s ecosystem.”