• Mounir Lakrouf

Notional Finance Trading Service

Updated: Jun 1


What Is Notional Finance?


Notional is a financial protocol developed and launched back in 2020 by a team of stakeholders. They were good at security, technology, trading as well as design.


Notional Finance is a novel Ethereum protocol introduced in the crypto market that enables crypto traders to borrow and lend digital assets at fixed rates. Notional lending and borrowing abilities at fixed rates have created new dimensions and financial design space for the Ethereum and Defi ecosystem. However, the most significant aspect of Notional is the governance that optimizes capital efficiency and all the requirements of liquidity providers.


How Does Notional Finance Work?


The lending and borrowing processes on Notional Finance are extremely intuitive from the user’s viewpoint, especially if they are already acquainted with these DeFi lending exchanges. Since the platform is still operating in its beta phase, the only crypto that can be borrowed is DAI, with a maximum limit capped at 997 DAI.


The National Finance platform works as follows:-


  • Users will need to choose a maturity date for their loan. The maturity date varies from 3 weeks to 3.5 months.

  • After choosing the maturity date, they need to select the amount they wish to borrow.

  • Users have to choose and confirm the amount of collateral they wish to deposit, and the minimum amount of collateral is 140%.

Note that, like any other Defi lending platform, the borrowed amount is automatically paid out to the Ethereum wallet as soon as the loan is confirmed. One can view the loan position in the Notional dashboard. Also, note that though the interest rates are fixed, there is no guarantee that the collateral level will remain fixed.


Keep in mind that a loan can have a fixed interest rate as well as a floating rate. In the case of a fixed interest rate, the interest rate remains intact for the duration of the loan. In the case of a floating loan, the interest rates keep on changing over the duration of the loan. Floating loans change depending on the situation in the market, prime rate as well as underlying index.



Why you should try Notional Finance?


Notional Lend: Lending digital currencies is made easy with Notional. Lenders can lend DAI and USDC at fixed rates. If one wants to lend their currency at a fixed interest rate, they can buy fCash tokens. The lender exchanges his currency during the trade with a greater, fixed amount of that particular currency at a specified time. This exchange rate determines the loan’s fixed interest rates between the time the trade takes place and the time when the fCash matures.


Notional Borrow: A user can also borrow with certainty on Notional. Borrowers can borrow DAI and USDC at fixed rates. If they want to borrow from Notional at a fixed interest rate, they can mint and sell their fCash in exchange for currency. As a borrower, first, they need to deposit collateral into their Notional Portfolio.


Notional Liquidity: Notional provides liquidity pools for users to earn profits. One can provide DAI and USDC and earn a yield. Liquidity providers, who capitalize liquidity pools, contribute fCash and currency and function as counterparties to the borrowers and lenders. In return for this contribution, the liquidity providers get fees every time a borrower or lender trades between fCash and currency and that makes Notional Finance a reliable bitcoin lending website that is preferred by many users.


Notional Finance gives crypto users the same access to stable financing. It also gives the ability to provide fixed-rate lending making the DeFi space accessible to more mainstream users. You can borrow against your crypto without worrying about changing interest rates.



Getting started with Notional Finance?


The notional Finance desktop app is available on the official website. However, to launch the app, users need to connect their best cryptocurrency wallet to view their portfolio on the app. Click HERE to get started.