Summary
In preparation for Notional’s upcoming quarterly roll occurring Wednesday, March 12th at 8:00 PM Eastern Time, we propose a set of parameter updates to Notional V3. Specifically, these interest rate models will be slightly narrower than Q1 2025 and reflect the lower level of interest rates across DeFi.
These interest rate models will focus fixed rate liquidity for ETH between 3% and 10.5%, between 7% and 18.5% for stables, between 1% and 8% for LSDs, and between 1% and 6% for wBTC. We believe that these curves will serve current market conditions well in addition to forecasted conditions in Q2 2025.
fCash Interest Rate Models
We propose the following set of fCash market parameters for Notional V3’s Mainnet and Arbitrum deployments.
3 Month fCash markets
| Parameters | ETH | Stablecoins | LSDs | wBTC |
|---|---|---|---|---|
| kinkUtilization1 | 35 | 35 | 35 | 35 |
| kinkUtilization2 | 80 | 80 | 80 | 80 |
| kinkRate1 (1/256) | 22 (3.05%) | 36 (6.96%) | 9 (0.88%) | 15 (1.03%) |
| kinkRate2 (1/256) | 75 (10.40%) | 96 (18.56%) | 81 (7.91%) | 88 (6.02%) |
| maxRate25BPS | 142 (35.5%) | 158 (49.50%) | 100 (25%) | 70 (17.5%) |
| minFeeRate5BPS | 8 (0.15%) | 8 (0.15%) | 8 (0.15%) | 8 (0.15%) |
| maxFeeRate25BPS | 3 (2%) | 3 (2%) | 3 (2%) | 3 (2%) |
| feeRatePercent | 8 (8%) | 8 (8%) | 8 (8%) | 8 (8%) |
| Initial proportion | 35% | 35% | 35% | 35% |
| Deposit share | 60% | 60% | 60% | 60% |
| Leverage threshold | 86% | 86% | 86% | 86% |
6 Month fCash markets
| Parameters | ETH | Stablecoins | LSDs | wBTC |
|---|---|---|---|---|
| kinkUtilization1 | 35 | 35 | 35 | 35 |
| kinkUtilization2 | 80 | 80 | 80 | 80 |
| kinkRate1 (1/256) | 22 (3.05%) | 36 (6.96%) | 9 (0.88%) | 15 (1.03%) |
| kinkRate2 (1/256) | 75 (10.40%) | 96 (18.56%) | 81 (7.91%) | 88 (6.02%) |
| maxRate25BPS | 142 (35.5%) | 158 (49.50%) | 100 (25%) | 70 (17.5%) |
| minFeeRate5BPS | 8 (0.15%) | 8 (0.15%) | 8 (0.15%) | 8 (0.15%) |
| maxFeeRate25BPS | 3 (2%) | 3 (2%) | 3 (2%) | 3 (2%) |
| feeRatePercent | 8 (8%) | 8 (8%) | 8 (8%) | 8 (8%) |
| Initial proportion | 35% | 35% | 35% | 35% |
| Deposit share | 40% | 40% | 40% | 40% |
| Leverage threshold | 86% | 86% | 86% | 86% |