Notional Airdrop is a protocol on Ethereum that facilitates fixed-rate, fixed-term crypto asset lending and borrowing through a novel financial instrument called fCash. Notional is designed to optimize capital efficiency and balance the needs of liquidity providers and the system’s end users.
Notional is airdropping 0.75% of the total supply to various early users of the platform. A snapshot was taken on July 4th, 2021 at 00:00 GMT and users who have borrowed, lent or provided liquidity more than or equal to 50 DAI/USDC as of the snapshot date will receive between 600 NOTE and 1800 NOTE.
Notional will airdrop 0.75% of the total supply to various early participants of the platform.
The snapshot was taken on July 4th, 2021 at 00:00 GMT.
All users who have borrowed, lent or provided liquidity more than or equal to 50 DAI/USDC as of the snapshot date will receive between 600 NOTE and 1800 NOTE.
A total of 741 addresses are eligible for this airdrop. Check here to see the eligible addresses.
The rewards will be distributed pre-V2 launch (tentatively) in September, pending audits.
For more information regarding the airdrop, see this post.
The Notional Protocol
fCash is a tokenized representation of a fCash flow. It represents the amount of tokens (i.e. Dai) that an account is either entitled to receive (CASH_RECEIVER) or obligated to pay (CASH_PAYER) at its designated maturity. For example, if an account holds +100 fCash tokens for a maturity at timestamp 100, it is entitled to 100 Dai at any time greater than or equal to timestamp 100. Similarly, -100 fCash tokens for the same maturity means that the account is obligated to pay 100 Dai at timestamp 100. A detailed description of lending and borrowing mechanics will follow.
fCash in one maturity (i.e. due to mature at timestamp 100) is fungible with other fCash tokens with the same maturity. However it is not directly fungible with fCash with different maturities. Also note that the entitlement to receive fCash (CASH_RECEIVER) is freely transferrable but the obligation to pay (CASH_PAYER) is not.
Notional Airdrop uses an internal accounting concept called current cash to represent deposits and matured cash flows. Since cash flows may be positive (CASH_RECEIVER) or negative (CASH_PAYER), current cash is represented as a signed integer (i.e. positive or negative).
When a fCash token matures, its positive or negative value is added to the account’s total current cash balance. This is discussed in the settlement section.
Each maturity defined above creates a market that functions similarly to a Uniswap exchange with an important distinction in how the rate curve functions. Each market is defined by the following variables:
maturity: The timestamp where all the fCash tokens in this market will mature.
totalfCash: The amount of fCash tokens available for purchase.
totalCurrentCash: The amount of cash (i.e. Dai) available for purchase.
totalLiquidity: The amount of liquidity tokens minted by liquidity providers in this market.
rateAnchor: Offsets the interest rate curve from zero, can be thought of this as a bias term.
rateScalar: A scalar that determines the slope of the interest rate curve.
lastImpliedRate: The implied period rate of the most recent trade.
Notional Airdrop Trading fCash tokens is done via a special liquidity curve that has been designed to minimize slippage when trading fCash tokens. Consider Uniswap’s constant product liquidity curve; it is bounded at zero and positive infinity. The advantage of this curve is that a trade can always find a market price regardless of how much liquidity is in the pool. The disadvantage is that exchange rates must move large amounts in order to accomodate this; the amount of slippage incurred would be intolerable for trading fixed term cash flows.
For example, if you were to trade 1% of the liquidity pool using the constant product curve for 1-month fCash, it could result in a 10% change in the interest rate. On an annualized basis, this means a 120% change in the interest rate. This is simply too volatile for a useful trading experience. Also note that this problem explodes exponentially as the token gets closer to maturity — that 10% change in the interest rate becomes almost a 50% change when the fCash is one week from maturity (a 600% change on an annualized basis). This is why Notional has a special liquidity curve designed for trading fCash that we describe next.
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