Notional Finance has come out of stealth with $3M in liquidity following a closed beta over the past quarter. Notional users can lend and borrow the stablecoins DAI and USDC at fixed rates using ETH or WBTC as collateral.
A 10k USDC loan has a fixed APR of 4.27%, while a 10k USDC deposit has a 3.61% APY, currently on notional.finance. This compares with variable borrow rates of at least 7% on Aave, Compound and dYdX, and a 9% stable rate on Aave, according to LoanScan. Lending rates on those DeFi platforms are also higher, at over 6%.
90% of loans in DeFi are issued at variable rates, while fixed-rate lending is the dominant form of financing in traditional financial markets, with over $2.5 trillion of fixed-rate debt issued in 2019 in the US alone.