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Fixed-rate lending startup Notional is growing its DeFi presence with the launch of its V2 upgrade, the company announced Monday. The platform offers fixed-rate debt using an on-chain automated market maker (AMM).

The company said the new iteration of its platform comes with an improved focus on security and liquidity, following a $10 million Series A raised in April led by Pantera Capital.

The protocol currently offers fixed-rate borrowing of USDC and DAI for up to one year, and wBTC and ETH borrowing for up to six months. It has received three independent audits from ABDK Consulting, Certora and Code Arena, according to a press release.

The company issues its own NOTE token (nToken) that qualifies as collateral on the platform, which users can borrow against without giving up any of their returns. The company says that 50% of the total nToken supply will be used to incentivize liquidity providers, with 20% to be distributed in the first year.

The company said it plans on front-loading incentive distribution to reward early liquidity providers, who can deposit DAI, USDC, ETH and wBTC to earn interest, liquidity fees and NOTE incentives.

NToken holders also receive governance perks that let them propose and vote on changes to Notional’s system parameters and the Notional smart contract.

The company said it plans to implement a Layer 2 solution in future versions of the platform in addition to increasing utility and governance for NOTE holders.

“Notional V2 brings the values of transparency, openness and efficiency to the $100 trillion fixed income market,” Notional CEO Teddy Woodward told CoinDesk. “We are extremely excited to kick off the next chapter of DeFi’s growth by enabling liquid fixed income products on Ethereum.”

The lending protocol’s V2 comes a year after launching out of stealth in Oct. 2020 after raising $1.3 million from Coinbase Ventures, 1Confirmation and Polychain.