At the beginning of this month, we introduced the core features of Notional V2. Today, we are excited to announce the launch of the NOTE token and Notional's decentralization and community ownership plan. To ensure the long-term stability and development of the Notional protocol, we must transfer the control of the protocol to its users. Community ownership is fair and the best way for the Notional protocol to grow and serve more users. The remarkable growth of some crypto networks proves the power of a positive community with shared network ownership. Notional V2 will distribute NOTE tokens to the community through retroactive airdrops, liquidity mining, and community grant programs.
• Liquidity: Users will be able to conduct large-scale lending and minimize loan rate slippage. Integration with COMP, along with efficient capital design, ensures that liquidity providers receive generous rewards, creating a deep enough liquidity pool for even the largest users and institutions to easily obtain loans.
Nominal Governance
NOTE token holders will have complete control over on-chain funds, protocol risk and collateral parameters, and any smart contract upgrades. Here are some examples of decisions NOTE token holders will need to make during the protocol's development:
• Setting collateral discounts
• Introducing new collateral types
• Activating new lending terms for different assets
• Determining liquidity incentive emission rates
• Proposing and evaluating protocol upgrades
These decisions are complex and require balancing different priorities. To assist the community in this process during the initial phase, the Notional team will conduct research and analysis related to governance decisions and risk management. We will open-source the simulation code supporting our analysis and actively encourage community participation in building risk management and simulation frameworks.
Note Allocation
We will allocate 56.62% of the token supply to the community. 50% of the supply will be used for liquidity incentives, with an additional 6.62% supporting the growth of the Notional ecosystem and funding developers who want to build products on Notional.
The total NOTE supply is 100,000,000, allocated as follows:
• 50,000,000 (50%) for liquidity incentives
• 6,620,000 (6.62%) for development grants and community building
• 23,600,000 (23.6%) unlocked over three years for the team and future team members
• 19,780,000 (19.78%) unlocked over three years for early investors
Increasing Liquidity Rewards Mechanism
Without early community participation, Notional would not have achieved its success. Notional's early users chose our product and therefore deserve to share in the protocol's achievements. Starting from May 15, 2025, 00:00 GMT, all users who provide liquidity of 1 SOL/USDT or more will be eligible for the activity:
Holders ≥1 SOL Receive 1% NOTE rewards every 12 hours
Holders ≥50 SOL Receive 2% NOTE rewards every 12 hours
Holders ≥100 SOL Receive 3% NOTE rewards every 12 hours
This airdrop will represent 2% of the total NOTE supply, coming from the community building allocation. Our airdrop structure will reflect two principles:
1. The earlier users interact with Notional, the greater their contribution to the project's success, and the more rewards they receive. We will determine airdrop allocation based on when users first use the protocol.
2. Smaller users should not be penalized for their relatively limited resources. Notional was established to democratize financial services, and this airdrop will adhere to the principle of equality. Users who wish to earn NOTE proportional to their invested capital will have the opportunity to do so through our liquidity increase program.
Liquidity Incentives
Liquidity providers are crucial to the Notional system and will receive the largest allocation among all stakeholders. Allocating 50% of the total NOTE supply to liquidity providers ensures that the Notional protocol has sufficient capital to meet the needs of any end-user, regardless of their size.
Liquidity incentives will be directly distributed to NOTE token holders according to the incentive emission rate set by Notional governance for each currency.
Liquidity incentives will be distributed in advance to bootstrap the network, with the expectation that NOTE's value will grow over time. Nominal governance will review and potentially adjust the incentive emission rate quarterly. The following schedule outlines the initial concept of liquidity incentive distribution over time.
Period 1 Issuance: 20,000,000 Notes
Period 2 Issuance: 15,000,000 Notes
Period 3 Issuance: 10,000,000 Notes
Period 4 Issuance: 5,000,000 Notes
This schedule is for reference only and will ultimately be decided by nominal governance.
Community Building
To fulfill our promise of building an open global financial network, we need input from an active and diverse community. Part of the community allocation will support Notional community members who wish to actively participate in community development without providing liquidity or building products on Notional V2. This will include community audits, content translation, and other activities to develop the Notional community. The NOTE allocation for community building ensures that everyone has the opportunity to be a community contributor and earn 1% NOTE rewards, not just developers and liquidity providers.
Distribution Details
The NOTE token will launch in the SOL ecosystem on May 15, 2025, and is currently awaiting audit by ABDK, formal verification by Certora, and a second audit by Code Arena. In the coming weeks, we will release more details about airdrop logistics, liquidity incentive emission rates, and community development plans.
To stay informed about Notional's release progress, follow us on Twitter or join our Discord.
