Notes.Finance Review – DEX for “Interest-Earning Stablecoins”


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We’re sure you’ve all heard about DEXes at this point. Decentralised exchanges that let users swap, stake, and farm huge amounts of yield have been popping up all over the place. The latest one to show up on our radar is Notes.Finance, which offers a unique value proposition in an increasingly crowded space — a place to trade and farm yield with the world’s first interest-earning stablecoins so lets continue on Notes.Finance Review.

What are interest-earning stablecoins?

Created by CoinFLEX , we think interest-earning stablecoins are going to make a big impact in the crypto scene and have the potential to disrupt the current stablecoin leaderboard. Unlike USDT, USDC, BUSD or any other stablecoin that you can think of, CoinFLEX’s flexUSD and notesUSD pay holders incredibly lucrative interest every 8 hours — just for holding them.

HODLers earn yield with no lock up periods and full transparency about how the interest is earned, which you’ll be happy to learn is not from giving out unsecured loans to ‘every man and his dog’. Instead, flexUSD provides liquidity to CoinFLEX’s repo markets, creating interest by a simple mechanism of supply and demand — the interest rate is therefore fully and organically determined by the current demand in the market. At the time of writing, flexUSD has been paying 25.44% APY over the last 7 days and from a quick look at their statistics page (, you can see that this isn’t just a one-off; flexUSD was paying a staggering 89% APY at the start of February 2021.

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What different types of interest-earning stablecoins are there?


noteUSD: Yield + Yield + Yield.

noteUSD combines the interest-earning powers of flexUSD +Note Tokens to create 3 yield-earning avenues daily.

FlexUSD: The world’s first interest-earning stablecoin

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flexUSD pays interest on-chain 3 times a day with a floating interest rate currently averaging 26.65% APY. Taking advantage of CoinFLEX’s repo market, flexUSD pays interest straight into holders’ wallets every 8 hours.

Note Tokens: Fixed Rate + Infinite Potential

A tokenised loan to trading firms that are active market makers in crypto and CoinFLEX. Note Token buyers can earn a fixed interest rate between 8–10% APY + 30% of the firm’s trading fees.

What can I do with interest-earning stablecoins?

If you’re looking to simply hold and earn interest with your stablecoins, buying and keeping flexUSD is a great way to do just that. Putting forward a very compelling argument for stablecoin holders to make a transition into flexUSD. Through Notes.Finance anyone with a metamask or any crypto wallet can use the ‘Swap’ function to get your hands on flexUSD and move it to your cold wallet where your interest payments will flow in every 8 hours.

Review Where Notes.Finance comes into play

For those of you getting into the DeFi space I’m sure you’re wanting to know if you can farm some serious yield, and the answer is yes! You can also use Notes.Finance to become an LP or AMM by adding to liquidity pools and staking your LP tokens back into the DEX.

Built on top of the smart contract developed by the Curve Finance team, Notes.Finance offers 3 types of liquidity pools, all of which are linked to Curve Finance’s ‘3Pool’ selection of stablecoins.

The pools currently open are:

  1. flexUSD + USDC+USDT+DAI (3Pool)
  2. noteUSD + USDC+USDT+DAI (3Pool)
  3. Note Tokens + USDC+USDT+DAI (3Pool)

All of these pools can create some incredible and impressive amounts of yield that would excite even the most experienced DeFi users. Liquidity providers (LP) of any of these pools are able to earn yields up to 500% APY combined (explained below). One aspect of Notes.Finance that we enjoyed was not having to worry so much about managing the risk of impermanent loss and spending hours researching which coins and pools we wanted to get involved in.

With Notes.Finance and their stablecoins, whilst there is some risk that the firms behind each Note Token (Note Tokens as described in the diagram above are stablecoins that represent $1 of a loan given to trading firms on default on their loans, this is a lot easier to deal with and manage than two individual and uniquely volatile cryptocurrencies. At the time of writing this, no trading firm had defaulted on their loans to and from what we learnt about the selection process, we’re confident it will be very, very rare.

What sources of yield can be earned by Liquidity Providers? Notes.Finance Review breakdown:

Notes.Finance Review 2021
Notes.Finance Review 2021
  1. FLEX Rewards are the daily payouts of FLEX Coin to the pools. As the TVL (total value locked) in notes in Notes.Finance goes up, this return will go down as it is spread out over a larger supply of notes.
  2. Fixed Yield is the daily fixed interest rate the trading firm pays to token buyers as a rebase, automatically increasing the pool’s balance of Note Tokens.
  3. 3Pool Returns are paid to 3Pool liquidity providers in CRV, the native token of Curve Finance.
  4. 30% Trading Fee is the 30% of each trading firm’s fees that goes to token holders. In the early days we started with a 1X Daily Volume: Loan requirement and will ratchet that up to 5X and then 10X over time. This yield scales with the number of borrowers, as more trading firms = more liquidity and more opportunities for firms to trade against each other.
  5. DEX Trading Fees are the fees collected by the DEX from slippage on each Note Token purchase and sale that DeFi users make. Investors may want to buy Note Tokens on the DEX in order to AMM, hold exposure to, or cash out of them. All of these transactions will result in yield for the AMM.

Who is involved?

Whilst CoinFLEX and their products are relatively young and new to the space, the people behind them and their investors add a lot of credibility to their efforts to provide liquidity to markets through innovative high yield, yet low risk, lending products for trading firms. CoinFLEX was co-founded by Mark Lamb. Mark has been involved in Bitcoin and cryptocurrencies since 2012 and began working in the industry in 2013 when he founded Coinfloor —the UK’s first and longest running crypto exchange.

Co-founder and CRO Sudhu Arumugam has over 20 years of experience working for banks, hedge funds and crypto exchanges across Europe and Asia. Having worked at the likes of Merrill Lynch and Sequoia Capital, Sudhu’s past experience and connections from traditional finance offer traditional finance knowledge and understanding that is always good to see in the wild west world that we all live in that is the crypto industry.

They also have some very big names who are investing in and backing them. The most well known investor that we’re sure you’ve heard of is Roger Ver, who is investing alongside a list of very credible and established investors from the crypto space such as Mike Komaransky, Electric Capital and Nascent Ventures, to name a few.

Curtis Spencer, a partner at Electric Capital had this to say:

 “CoinFLEX has created a stablecoin platform that can create underlying interest for everyone while they are trading and investing in crypto. We think Notes.Finance will be an important piece in the DeFi landscape.”

Closing thoughts on Notes.Finance Review

CoinFLEX is definitely worth keeping an eye on. Their innovative interest-earning stablecoins have the potential to disrupt the current stablecoin hierarchy and whilst it won’t be easy and they have a long road ahead of them, the launch of Notes.Finance provides a way for their stablecoins to reach a global audience. With the ever growing interest in the DeFi space, we wouldn’t be surprised if you start hearing a lot more about CoinFLEX and Notes.Finance in the coming months, and if you’re a yield farmer out there looking for the latest project with small volumes locked up and high APY you might want to check out Notes.Finance sooner rather than later.

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