Notional Governance Reference

Describes Notional administrative and change control processes

Notional is undergoing a process of gradual decentralization. Due to the complexity of the system, the creators of the protocol feel that it is necessary to be able to respond quickly in case of issues during the initial launch of the system. Because some economic conditions in Notional only arise at specific points in time (i.e. during market initialization every three months), the period of administrative control may last longer than other DeFi protocols.


Notional is designed to be fully upgradeable. Fixed rates are a complex and sophisticated product and ensuring that the system can evolve over time is critical to its long term success.

Upgrades occur by changing the Proxy implementation to point to a different Router implementation.

Every upgrade to the system will undergo a thorough audit from a reputable, independent smart contract auditor and the audit will be published publicly.


Notional can be paused by an address called the Pause Guardian. This address is only permitted to downgrade the Notional system such that it becomes read only. This would be a highly disruptive act but exists in the case of an emergency. Optionally, this address can enable liquidations in the case that the system needs to liquidate and can safely do so.

The owner of Notional (a different address) can restore the system through a smart contract upgrade. Currently the Pause Guardian is a 2 of 3 multisig held by the Notional company.

Administrative Control

Currently, Notional is controlled by a 3 of 5 multisig where two signers are the founders of Notional (Jeff and Teddy) and the three other signers are community members. This multisig has the ability to upgrade the Notional system and also change its governance parameters. The signers of this multisig are committed to only taking actions as a result of a successful snapshot vote or emergency situation (i.e. smart contract vulnerability).


There is currently no Timelock deployed for changes to Notional.

Decentralization Roadmap

We plan to gradually decentralize administrative control of the system to use a Timelock + Governor Alpha based system after the launch of Staked NOTE. Staked NOTE, NOTE and Treasury Management contracts will have their ownership transferred to on chain governance in Q2 of 2022. After that, we will gradually transition various administrative functions of Notional to on chain governance away from the multisig.

Last updated