Notional Finance Quarterly Report: Q2 2023

Pierre-Yves Gendron
Pierre-Yves Gendron

The second quarter proved relatively slow for Notional V2 as the team focused its efforts on the upcoming release of Notional V3.

Although Notional V2 KPIs have been on the decline over the recent quarters, we believe that the release of Notional V3 on Mainnet and Arbitrum will be an inflection point as we turn our focus from development to growth.

We made great progress towards the release of Notional V3 during Q2. We completed the audit of V3 contracts and deployed the protocol on Arbitrum for testing purposes. We are excited to move forward with the launch of V3 and believe it will set a new standard for lending protocols in DeFi and unlock Notional’s full potential.

You can download the full Notional quarterly report here:

During the quarter, Notional saw its TVL decrease from $36M to $34M. Nevertheless, the protocol still processed $20M in transaction volume and generated $15K in revenue.

Notional facilitated $9M of volume in January, $8M in February, and $26M in March. Borrowers drove 54% of the overall trading activity, while lenders drove the remaining 46%.

LP returns in Q2 remained high, with nUSDC and nDAI annualized returns at 10.02% and 8.77%, respectively. The nETH annualized yield was 7.2% despite lower ETH utilization from leveraged vault borrowers.

Going forward, we anticipate nTokens returns to increase due to higher organic returns from Notional V3 Prime Cash and higher borrowing demand from leveraged vault users.

We are very excited to move forward with the launch of Notional V3 on Arbitrum and Mainnet over the coming months. Once Notional V3 is fully operational on Arbitrum, we will move forward with the migration of Notional V2 to V3 on Mainnet. From there, we will focus on growing Notional V3 by listing new markets and new vaults.

About Notional Finance📈

Notional is the #1 Ethereum-based protocol for borrowing and lending at fixed rates and fixed terms. With more than $675M in total fixed rate lending volume, Notional is now a top 10 lending protocol providing core DeFi infrastructure. ‌‌‌
‌‌‌Notional’s latest product launch, leveraged vaults, launched in beta in Q4 2022. A new DeFi primitive built on fixed rate borrowing, leveraged vaults execute specific yield strategies while collateralizing the vault assets, allowing users to maximize capital efficiency by taking up to 10x leverage.

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 in November '21 with a host of new features as well as the $NOTE governance token.

To find out more, follow Notional on Twitter @NotionalFinance, subscribe to the newsletter, join the Discord, or check out the website to learn more.

Pierre-Yves Gendron

Quantitative analyst