Return Generation

This page covers how Noon's yield is produced and how displayed APY is calculated.

Where returns come from

Reserves backing $USN are deployed across a diversified strategy basket: tokenised U.S. Treasury Bills, CLOs, Private Credit, DeFi lending, Principal Tokens, Looping, and Funding Rate Arbitrage (Perps). Each strategy is documented in The Yield Engine. The mix shifts with market conditions. The protocol does not rely on one return source.

How the protocol's daily return is measured

Each day, the protocol measures net return against the value of managed assets. It annualises that result into the APY figures shown on app.noon.capital.

Each day, Noon calculates the distributable net return after Insurance and Operations allocations. The APY is calculated as:

Because all reserve returns accrue to staked USN:

The displayed 7-day and 30-day APYs are rolling averages of these daily sUSN APY figures over their respective periods.

$sUSN holders receive returns from the entire reserve. Only staked $USN shares in those returns. Therefore, $sUSN APY exceeds the raw return on assets whenever some $USN remains unstaked.

Why 7-day and 30-day averages

The app shows average APYs rather than a single day's figure because daily returns are noisy. Strategy income does not arrive in a smooth line. A one-day snapshot can mislead in either direction. Averages give a fairer view of recent performance. They remain backward-looking measurements, not forecasts.

Noon displays both 7-day and 30-day average APYs to allow users to see how its

The split (in short)

Distributable returns are split 80% to $sUSN holders, 10% to the Insurance Fund, and 10% to the Operations Fund. The Insurance Fund's share is not a static destination. Once contributions complete their seasoning period, surplus routes onward.

To read more about how Noon's return is distributed, see the Return Distribution page.