NOTE is an ERC-20 token that governs the Notional protocol. NOTE holders can propose, vote on, and implement changes to Notional system parameters and smart contracts. Each NOTE holder gets one vote per NOTE that they hold.
NOTE Holder Responsibilities
NOTE holders will be responsible for managing the Notional on-chain treasury, setting risk and collateralization parameters, and voting on any proposed upgrades to the Notional smart contracts. Here is a short, non-exhaustive list of things NOTE holders will need to propose and vote on:
Setting liquidity fees
Setting collateral haircuts
Onboarding new collateral types
Activating new maturities for lending and borrowing different assets
Determining liquidity incentive emission rates for different currencies
Proposing and evaluating upgrades to the protocol
Voting and Delegation
NOTE holders can delegate their voting rights to themselves, or an address of their choice. Addresses delegated at least <threshold> NOTE can create governance proposals.
When a governance proposal is created it enters a 2 day review period, after which voting weights are recorded and voting begins. Voting lasts for 3 days; if at least 4,000,000 votes are cast and a majority vote for the proposal, the proposal is passed and queued in the Timelock. The proposal can be implemented 2 days after it moves to the Timelock. In total, any change to the protocol takes at least one week.
Notional incentivizes liquidity providers by distributing NOTE to nToken holders. nToken holders accrue NOTE rewards proportional to their share of the total NOTE outstanding and to the annual NOTE emission rate for that currency type. Current annual emission rates by currency are as follows: