Summary

In preparation for Notional’s upcoming quarterly roll occurring Friday, September 13th at 8:00 PM EDT, we propose a set of parameter updates to Notional V3. Specifically, these interest rate models will be narrower than Q3 2024 and reflect the generally lower level of interest rates in ETH and stablecoins in the market today.

These interest rate models will focus fixed rate liquidity for ETH between 4% and 12.5%, between 5.5% and 14.25% for stables, between 1% and 9.5% for LSDs, and between 0.75% and 3.5% for wBTC. We believe that these curves will serve current market conditions well, while also being sufficiently permissive to accommodate more risk-on market conditions should they appear during Q4.

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)	29 (4.02%)	35 (5.54%)	9 (1.05%)	11 (0.75%)
kinkRate2 (1/256)	90 (12.48%)	90 (14.24%)	81 (9.49%)	51 (3.49%)
maxRate25BPS	142 (35.5%)	152 (40.5%)	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)	29 (4.02%)	35 (5.54%)	9 (1.05%)	11 (0.75%)
kinkRate2 (1/256)	90 (12.48%)	90 (14.24%)	81 (9.49%)	51 (3.49%)
maxRate25BPS	142 (35.5%)	152 (40.5%)	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%