Notional’s protocol consists of three main components: the fCash token, the liquidity pools, and the lending and borrowing contracts.1. fCash Token: The fCash token represents a fixed-rate loan agreement between the lender and the borrower. It is an ERC-20 token that is redeemable for a specific amount of the underlying currency (e.g., DAI) at a fixed future date. The fCash token is created when a user lends funds or borrows funds on Notional.2. Liquidity Pools: Notional operates specialized liquidity pools that allow users to efficiently trade between cash and fCash tokens. These pools ensure that there is always liquidity available for users to enter or exit fixed-rate positions. The exchange rate between cash and fCash tokens in the liquidity pools implies a fixed rate of interest for the duration of the fCash token’s maturity.3. Lending and Borrowing Contracts: Users can lend or borrow stablecoins on Notional by interacting with the lending and borrowing contracts. Lenders can deposit stablecoins into the lending contract and specify the desired fixed interest rate and term. Borrowers can borrow stablecoins by depositing collateral (e.g., ETH) into the borrowing contract and specifying the desired fixed interest rate and term. The borrowing contract mints fCash tokens for the borrower, representing their fixed-rate loan agreement.Notional’s protocol allows users to earn a fixed rate of interest on their stablecoins by lending them out, or to borrow stablecoins at a fixed rate for a specific term. The use of fCash tokens and liquidity pools ensures that users can easily enter or exit fixed-rate positions, providing liquidity and flexibility to the protocol.

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