Summary
We propose deploying Notional V3 on Mainnet with the following currencies.
- ETH
- DAI
- USDC
- WBTC
- wstETH
- FRAX
- rETH
- USDT
- cbETH
- sDAI
Each currency will support a variable rate market. Additionally, we propose that all these currencies support 3-month and 6-month fixed-rate markets, except for WBTC and sDAI, since they are primarily used as collateral currencies.
Proposal
Minimum Collateral ratios and liquidation discounts
| Currency | Haircut | Buffer | Liquidation discount | Minimum collateral ratio* | Supply Cap |
|---|---|---|---|---|---|
| ETH | 87% | 120% | 5% | 125% | 25,000 |
| DAI | 92% | 109% | 4% | 118% | 25,000,000 |
| USDC | 92% | 109% | 4% | 118% | 50,000,000 |
| WBTC | 84% | 120% | 5% | 130% | 500 |
| wstETH | 83% | 120% | 6% | 131% | 10,000 |
| FRAX | 80% | 109% | 4% | 136% | 10,000,000 |
| rETH | 83% | 120% | 6% | 131% | 10,000 |
| USDT | 85% | 109% | 4% | 128% | 25,000,000 |
| cbETH | 83% | 120% | 6% | 131% | 10,000 |
| sDAI | 92% | 109% | 5% | 118% | 25,000,000 |
*Against stables (ex:USDC)
The full list of governance parameters is presented in this spreadsheet. Supply caps will be increased gradually by governors based on user demand up to the values specified in the table above.
Variable Interest Rate Models
| Currency | Kink1 Utilization | Kink2 Utilization | Kink Rate 1 | Kink Rate 2 | Max Rate | Fee Rate |
|---|---|---|---|---|---|---|
| ETH | 75% | 80% | 4.5% | 11.0% | 195% | 20% |
| DAI | 80% | 85% | 4.7% | 11.8% | 100% | 20% |
| USDC | 80% | 85% | 4.7% | 11.8% | 100% | 20% |
| WBTC | 65% | 70% | 2.3% | 4.2% | 150% | 20% |
| wstETH | 70% | 75% | 1.7% | 3.5% | 150% | 20% |
| FRAX | 80% | 85% | 4.7% | 11.8% | 100% | 20% |
| rETH | 70% | 75% | 1.7% | 3.5% | 150% | 20% |
| USDT | 80% | 85% | 4.7% | 11.8% | 100% | 20% |
| cbETH | 70% | 75% | 1.7% | 3.5% | 150% | 20% |
| sDAI | 80% | 85% | 1.3% | 3.8% | 100% | 20% |
The full list of Variable Interest Rate Model parameters is presented in this spreadsheet.
Fixed Interest Rate Models
3 Month fixed rates markets
| Currency | Kink1 Utilization | Kink2 Utilization | Kink Rate 1 | Kink Rate 2 | Max Rate | Fee Rate |
|---|---|---|---|---|---|---|
| ETH | 55% | 80% | 4.0% | 10.0% | 30% | 8% |
| DAI | 60% | 80% | 4.6% | 8.6% | 30% | 8% |
| USDC | 60% | 80% | 4.6% | 8.6% | 30% | 8% |
| wstETH | 60% | 80% | 1.0% | 4.0% | 30% | 8% |
| FRAX | 60% | 80% | 4.6% | 8.6% | 30% | 8% |
| rETH | 60% | 80% | 1.0% | 4.0% | 30% | 8% |
| USDT | 60% | 80% | 4.6% | 8.6% | 30% | 8% |
| cbETH | 60% | 80% | 1.0% | 4.0% | 30% | 8% |
6 Month fixed rates markets
| Currency | Kink1 Utilization | Kink2 Utilization | Kink Rate 1 | Kink Rate 2 | Max Rate | Fee Rate |
|---|---|---|---|---|---|---|
| ETH | 55% | 80% | 4.0% | 10.0% | 30% | 8% |
| DAI | 60% | 80% | 4.5% | 8.0% | 25% | 8% |
| USDC | 60% | 80% | 4.5% | 8.0% | 25% | 8% |
| wstETH | 60% | 80% | 1.0% | 4.0% | 25% | 8% |
| FRAX | 60% | 80% | 4.5% | 8.0% | 25% | 8% |
| rETH | 60% | 80% | 1.0% | 4.0% | 25% | 8% |
| USDT | 60% | 80% | 4.5% | 8.0% | 25% | 8% |
| cbETH | 60% | 80% | 1.0% | 4.0% | 25% | 8% |
We suggest allocating 60% of LP deposits to 3-month markets and 40% to 6-month markets. Alongside, we recommend initializing all fixed-rate markets at a utilization rate of 30%. This will initialize fixed rate markets at lower rates, facilitating borrowing from these markets. Furthermore, we propose setting leveraged thresholds at 84% across all markets.
We suggest setting the reserve fee share to 80% such that 80% of fixed rate trading fees will go to the protocol reserves while the remaining 20% of fees will be redistributed to liquidity providers.
The full list of Fixed Interest Rate Model parameters is presented in this spreadsheet.