fCash Markets

fCash tokens (Notional's fixed rate instruments) are similar to zero-coupon bonds. They are defined by a currency type and a maturity date. At maturity, fCash can be redeemed on Notional for its currency type. Any time before maturity, fCash can be transferred or traded.

For example, December 1st 2023 fDAI is an fCash token. This fCash token is transferable, and tradable. And At maturity (December 1st, 2023), 1 December 1st 2023 fDAI token can be redeemed for 1 DAI on Notional. In other words, fCash tokens represent specific amounts of currency at specific future dates. You can learn more about fCash here.

To make fCash tradable, Notional uses fCash liquidity pools where users can borrow and lend at fixed rates. Each Notional V3 fCash liquidity pool is a trading venue for a pair of Prime Cash tokens (money market instruments) and fCash tokens (zero coupon bonds) and refers to a specific maturity (ex: a Dec 1 2023 liquidity pool would hold Dec 1 2023 fCash and Prime Cash).

Users can either provide liquidity (add Cash and fCash to the liquidity pool), borrow (receive Prime Cash in exchange for selling fCash) or lend (receive fCash in exchange for Prime Cash) to these liquidity pools. Learn more about how liquidity providers, borrowers and lenders interact with liquidity pools here.

fCash Market Parameters

Notional's governance has the ability to set:

  • The number of fCash Market maturities that are enabled for a given currency;

  • The fCash Interest Rate Models for each fCash market;

  • The fCash markets initial utilization rates;

  • fCash valuation for collateral purposes.

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