Notional Profile picture
Sep 7 10 tweets 3 min read
1/ Today we’re excited to announce our next product, and a paradigm shift in DeFi lending.

Leveraged vaults.…
2/ Leveraged vaults give users highly leveraged exposure to the returns of select DeFi yield strategies.

Max leverage varies by strategy, but users can expect 10X+.

How it works:
3/ Leveraged vaults are whitelisted smart contracts that execute specific yield strategies.

Users can borrow at a fixed rate from Notional to deposit into leveraged vaults.

Users get leverage by borrowing more than their initial deposit.

Notional can offer this safely because
4/ The assets in leveraged vaults are held by Notional as collateral against the user’s loan.

If the value of the assets fall too low relative to the user’s debt, they can be liquidated.

This means users get high leverage and Notional doesn’t compromise on overcollateralization
5/ An example:

1. A user borrows 700k USDC from Notional at 4%

2. The user deposits 100k of their own money + the 700k they borrowed into the Balancer/Aura boosted stablecoin vault yielding 8%:
6/ After three months, if the strategy continues to yield 8%, the user will have made 9k USDC profit after repaying their debt + interest to Notional.

That’s a 36% APY.
7/ Leveraged vaults benefit all Notional users:

Vault users borrow a lot -> higher interest rates for lenders

Vault users increase transaction volumes -> higher returns for LPs

Vault users pay fees -> more revenue for the protocol
8/ Leveraged vaults will launch with three initial strategies:

- wstETH/ETH Balancer/Aura LP
- Boosted stablecoin Balancer/Aura LP
- Notional fCash spread trading

@balancerlabs @AuraFinance
9/ Leveraged vaults usher in a new era of capital-efficiency in DeFi.

Users get highly concentrated exposure to strategy returns.

Secure, decentralized protocols get easier access to capital and liquidity.

Everyone wins.
10/ These three initial leveraged vaults only scratch the surface of what is possible.

If you have ideas for vaults you want to see, come talk to us.

Let’s build our way out of this bear market and move DeFi forward together.

• • •

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More from @NotionalFinance

Sep 7
1/ 🧵Some rational thoughts about the merge and how to play the maximize your ETH game🎲 👇
2/The consensus opinion is the merge is a free money event, and you want to maximize the ETH you’re holding. Obvious play is to borrow it: if you borrow the ETH for a very short period of time you pay a small amount in interest but you get the entire ETH PoW airdrop. 🔌 💰
3/ But this creates systemic risks: crypto lenders anticipate full utilization of ETH markets. If ETH lending markets are fully utilized, they aren’t redeemable for ETH, and can’t reliably be liquidated even as borrowers are able to use loaned ETH as collateral.
Read 9 tweets
Sep 6
1/ The August fixed rates monthly recap is out!

💸Total loan volume: $5,000,000
🏦Protocol revenue: $5,987 in trading fees and $27,996 in COMP incentives
🥩Staking APY: 69% w/ ~43% of circulating $NOTE staked
🏦Leveraged Vaults 🔜

Full🧵 & link 👇
Leveraged Vaults 😱
✅Allow users to borrow cash at a fixed rate from Notional, then deposit it into a whitelisted smart contract executing a specific yield strategy.
✅Code is already open sourced
@sherlockxyz audit contest soon
✅Capped launch targeting early q4
Website Relaunch💅
The site is getting a refresh, and should go live around leveraged vault launch. Sneak peak👇
Read 8 tweets
Jan 7
Yesterday, Notional received a critical bug report via @Immunefi and patched the issue in under an hour.

No user funds were lost and no user funds are at risk.

Users can continue to provide liquidity or lend and borrow at fixed rates safely on Notional.
The affected code related to functionality that is not in use, and it has been disabled.

No user-facing functionality is affected.

Users can continue to provide liquidity or lend and borrow at fixed rates safely on Notional.
The white hat who reported the bug will receive $1 million USD and a 100,000 NOTE bonus for their efforts and our bounty program will continue.
Read 4 tweets
Nov 1, 2021
🚨Notional V2 is live!🚨

Get started with fixed rates now 🔗

More info 🔗…
V2 launch also marks the beginning of our liquidity mining program for the $NOTE governance token - 50% of the total supply is earmarked for LPs, with 20% of the total supply for year 1.…
Biggest upgrades from V1?
-Auto-rolling nTokens for LPs (can also be used as collateral for borrowing against).
-Lend AND borrow up to 1yr at launch (2, 5, 10 & 20 yr coming).
-LP w/ your borrow collateral in the same transaction (100% capital efficiency).

Still SO easy to use!
Read 7 tweets

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