1/ Today we’re excited to announce our next product, and a paradigm shift in DeFi lending.
Leveraged vaults.
blog.notional.finance/introducing-le…
Leveraged vaults.
blog.notional.finance/introducing-le…
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:
👇
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
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
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%:
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.
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
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
- 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.
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.
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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