Notional Finance: pioneer of fixed rate lending track

Fun coin 2021-09-14 16:15:33 阅读数:879

notional finance pioneer fixed rate

at present DeFi Most of the loan products in China bear interest at floating interest rates , And interest rates fluctuate frequently 、 It's a big one , So many users want to have products that can deposit and loan at a fixed interest rate , Help users lock in borrowing costs or deposit benefits .

Notional Finance: The pioneer of the fixed rate lending track Compound Medium USDC Trend of loan interest rate

There are not many projects providing fixed rate lending products in mainstream lending agreements .

AAVE Fixed rate loan products have already been launched , But only a few currencies are supported , And the fixed loan interest rate has almost always remained more than twice the floating interest rate , It is less attractive to users who need to borrow .

Notional Finance: The pioneer of the fixed rate lending track AAVE in USDC The trend of loan interest rate

Fixed rate loan agreement is a track with large development space , Compared to the size of tens of billions of dollars in floating rate loan agreements , Fixed rate lending agreements are currently only $10 million .

Notional Finance Is one of the earliest pioneers of this track , Its mode setting is simple 、 Exquisite , It is convenient for ordinary users to understand and operate .

At present, it has a stable currency USDC and DAI Time limit 3 Monthly sum 6 Months of fixed rate products , among 3 The product size for a period of months is about 300 Thousands of dollars ,6 The product size for a period of months is about 50 Thousands of dollars .

Notional Finance: The pioneer of the fixed rate lending track Notional Finance in USDC Market size and Yield Trend

Notional Finance The model is that users buy and sell zero coupon bonds that are due and cashed (fCash), Lock in deposit income or borrowing cost according to the discount rate of transaction price .

fCash It includes Positive fCash as well as Negative fCash, The former is a negotiable zero coupon bond , The latter is a record of non-negotiable liabilities .

fCash Secured by the borrower or liquidity provider ETH、WBTC、DAI or USDC Cast , And the mortgage rate is not lower than 140%, So depositors can trust fCash Be able to pay in full when due .

Specific use process

The borrower borrows at a fixed interest rate :

1. Provide excess collateral .

2. The mortgage rate is not lower than 140% Under the condition of , Cast a certain amount of fCash And select the due date .

3. Sell in the liquidity pool Positive fCash, Get the corresponding stable currency , And lock the borrowing cost according to the discount rate .

4. Buy back in advance Positive fCash To redeem collateral or provide adequate coverage at maturity Negative fCash A stable currency to pay off debts .

The process by which depositors deposit at a fixed interest rate :

1. Buy in the liquidity pool with the corresponding stable currency Positive fCash, And lock the deposit interest according to the discount rate .

2. Sell in advance Positive fCash When the principal and interest are recovered or due, the platform cashes at face value fCash.

Notional Finance The advantage is , In addition to playing the roles of borrower and depositor , To increase fCash The depth of the liquidity pool , The platform also allows users to act as special market makers to earn transaction fees and floating interest income .

The process by which market makers earn transaction fees and floating interest income :

1. Provide excess collateral .

2. The mortgage rate is not lower than 140% Under the condition of , Cast a certain amount of fCash And select the due date .

3. take Positive fCash And the corresponding stable currency LP Token, Into the liquidity pool , Earn transaction fees .

4. While earning transaction fees , because Positive fCash And the corresponding stable currency , Market makers can also earn a floating interest income , See the figure below for details .

Notional Finance: The pioneer of the fixed rate lending track Notional Finance Floating interest income that market makers may earn

Notional Finance: The pioneer of the fixed rate lending track Notional Finance Relationship diagram of three types of roles that users can play

To make a long story short , Fixed rate loan agreement is a track with great development potential ,Notional Finance Is one of the pioneers of this track , It is also an innovative project with better development .

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