Notional Finance Supports the Post-Merge POS Chain
The merge is coming - the forks may be as well. A message from the Notional core team on what the future may bring.
As any web3 user knows, work on Ethereum's set of upgrades, which will transition the chain from proof-of-work (POW) consensus layer to the proof-of-stake (POS) consensus layer, aka 'the merge', has been ongoing for several years, and is believed to be rapidly approaching a go-live date.
The Notional core team wants to make it clear that after the transition, no support or resources will be allocated towards supporting Notional on any forks - only the core POS Ethereum chain will continue to be supported and all near-term development and updates will continue on this mainnet.
We firmly believe that the vast majority of the DeFi ecosystem will do the same and have already seen announcements from major infrastructure providers announce as such. For example, as reported, Notional uses Chainlink oracles to provide the most accurate data feeds necessary to maintain on-chain liquidity pools and liquidation frameworks. Chainlink recently announced,
"The Chainlink protocol and its services will remain operational on the Ethereum blockchain during and after the Merge to the PoS consensus layer. Users should be aware that forked versions of the Ethereum blockchain, including PoW forks, will not be supported by the Chainlink protocol. This is aligned with both the Ethereum Foundation’s and broader Ethereum community’s decision, achieved via social consensus, to upgrade the Ethereum blockchain to PoS consensus."
For Notional users, we expect that everything should continue uninterrupted through the merge - there will be no action necessary from users. There are several possible scenarios for what could happen in a post-merge, forked ETH world, but we believe none present a viable economic strategy that would result in long-term success. Without oracle support or stablecoin liquidity/support on a forked chain, any forked protocols, including Notional, will not function as designed.
Additionally, as we’ve pointed out in previous posts, a healthy network of liquidators that sell assets of undercollateralized accounts is an essential component of any borrowing and lending protocol. We cannot speak to the potential actions of other actors running liquidations on Notional, but no Notional liquidation bots will be present on a POW chain fork. Without oracle or a robust liquidation mechanism on a fork, any and all user funds would be in peril.
As always, we welcome forum posts, comments or proposals from the community regarding the merge or any other parameters related to Notional Finance. $NOTE holders can make a Notional Improvement Proposal (NIP) via the Commonwealth forum. Voting is gas-free and happens on Snapshot.
About Notional Finance📈
Notional is the first decentralized, Ethereum-based protocol for borrowing and lending at fixed rates and fixed terms. With variable rate lending, DeFi can only serve a small segment of the crypto lending market because variable interest rates don’t provide the certainty that lenders and borrowers require. Notional fixes this by creating a true market for lenders and borrowers that empowers individual investors, business owners and institutional investors.
After raising a $10 million Series A in May 2021 from some of the top VC firms, including Coinbase Ventures, Notional’s protocol was relaunched on 11/1 with a host of new features as well as the $NOTE governance token. Notional is now a top 10 DeFi lending protocol with more than $500M in total lending volume.
To find out more, follow Notional on Twitter @NotionalFinance, subscribe to the newsletter, join the Discord, or check out the website to learn more.
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