# How it works

## <mark style="color:orange;">Our building blocks</mark>

<mark style="color:blue;">**Noon**</mark> features a familiar dual token structure:

* <mark style="color:purple;">$</mark><mark style="color:purple;">**USN**</mark> (<mark style="color:purple;">**USN**</mark>) is Noon’s stablecoin. It is pegged 1:1 to the US dollar.
  * Staking <mark style="color:purple;">**USN**</mark> allows users to access <mark style="color:purple;">$</mark><mark style="color:purple;">**sUSN**</mark> (<mark style="color:purple;">**sUSN**</mark>), a token which appreciates as the protocol generates return
* <mark style="color:green;">$</mark><mark style="color:green;">**NOON**</mark> (<mark style="color:green;">**NOON**</mark>)is <mark style="color:blue;">**Noon’s**</mark> governance token (available after <mark style="color:green;">**$NOON**</mark> TGE[^1] in Q2 2025).
  * Staking <mark style="color:green;">**NOON**</mark> allows users to access <mark style="color:green;">$</mark><mark style="color:green;">**sNOON**</mark> (<mark style="color:green;">**sNOON**</mark>), a staked Governance token

## <mark style="color:orange;">Mechanics</mark>

This is a very quick summary of the mechanics of the <mark style="color:blue;">**Noon**</mark> protocol.

### Acquiring and divesting tokens

<mark style="color:orange;">**Acquire**</mark><mark style="color:orange;">:</mark> Users can use collateral (like USDT or USDC) to mint or buy <mark style="color:purple;">**USN**</mark>. Users can stake <mark style="color:purple;">**USN**</mark> to get <mark style="color:purple;">**sUSN**</mark> - or buy it on the open market. Only users and team members will be granted <mark style="color:green;">**NOON**</mark> - everyone else will need to buy it on the open market. Users will be able to stake <mark style="color:green;">**NOON**</mark> to receive <mark style="color:green;">**sNOON**</mark>.

<mark style="color:orange;">**Divest**</mark><mark style="color:orange;">:</mark> Users can sell <mark style="color:purple;">**USN**</mark> and <mark style="color:purple;">**sUSN**</mark> on the open market. Alternatively, users can unstake <mark style="color:purple;">**sUSN**</mark> to receive <mark style="color:purple;">**USN**</mark>, and then redeem <mark style="color:purple;">**USN**</mark> for USDC or USDT. Users will be able to unstake <mark style="color:green;">**sNOON**</mark> to recieve <mark style="color:green;">**NOON**</mark>, and sell <mark style="color:green;">**NOON**</mark> on the open market.

### Yield generation and distribution

<mark style="color:orange;">**Yield generation**</mark><mark style="color:orange;">:</mark> Collateral received by <mark style="color:blue;">**Noon**</mark> is used to generate yield via our delta-neutral strategies.

<mark style="color:orange;">**Return distribution**</mark><mark style="color:orange;">:</mark> 80% of the protocol's raw returns are directed to <mark style="color:orange;">**sUSN**</mark> holders. 10% are directed to the Noon Insurance Fund. 10% are directed to the Noon Operations Fund.

### Insurance and operations funds

<mark style="color:orange;">**Noon Insurance Fund**</mark><mark style="color:orange;">:</mark> The <mark style="color:blue;">**Noon**</mark> Insurance Fund receives 10% of protocol yield. It uses its funds to address any security incidents that impact <mark style="color:blue;">**Noon**</mark> users. After 3 months, if unused, funds are distributed to <mark style="color:green;">**$sNOON**</mark> holders.

<mark style="color:orange;">**Noon Operations Fund**</mark><mark style="color:orange;">:</mark> The <mark style="color:blue;">**Noon**</mark> Operations Fund receives 10% of protocol yield. It uses these funds to cover the costs of <mark style="color:blue;">**Noon**</mark>'s operations. After covering these costs, and building up a operating reserve, the <mark style="color:blue;">**Noon**</mark> Operations Fund will re-direct all excess funds to the <mark style="color:blue;">**Noon**</mark> Insurance Fund.

### Token value propositions

<mark style="color:orange;">**Value proposition of**</mark>**&#x20;**<mark style="color:purple;">**USN**</mark><mark style="color:orange;">:</mark> <mark style="color:purple;">**USN**</mark> holders forgo rights to the raw yield generated by the deposited collateral. Instead, <mark style="color:purple;">**USN**</mark> holders are rewarded with a disproportionate governance token reward. Holders of <mark style="color:purple;">**USN**</mark> will be rewarded if and when the value of the <mark style="color:blue;">**Noon**</mark> governance token appreciates.

<mark style="color:orange;">**Value proposition of**</mark>**&#x20;**<mark style="color:purple;">**sUSN**</mark><mark style="color:orange;">:</mark> <mark style="color:purple;">**sUSN**</mark> holders receive the majority of the yields generated by the deposited collateral. This yield is boosted by the yield foregone by <mark style="color:purple;">**USN**</mark> holders. <mark style="color:purple;">**sUSN**</mark> holders also receive a small amount of governance tokens to ensure they can participate in <mark style="color:blue;">**Noon**</mark> governance.

<mark style="color:orange;">**Value proposition of**</mark>**&#x20;**<mark style="color:green;">**NOON**</mark><mark style="color:orange;">:</mark> <mark style="color:green;">**NOON**</mark> holders will be able to stake their tokens to receive <mark style="color:green;">**$sNOON**</mark>.

<mark style="color:orange;">**Value proposition of**</mark>**&#x20;**<mark style="color:green;">**sNOON**</mark><mark style="color:orange;">:</mark> <mark style="color:green;">**sNOON**</mark> holders will be able to vote on all Noon governance proposals, like the addition of new delta neutral strategies to the protocol. <mark style="color:green;">**$sNOON**</mark> holders will also receive any unused funds from the <mark style="color:blue;">**Noon**</mark> Insurance Fund.&#x20;

### Points and boosts

<mark style="color:orange;">**Points program**</mark><mark style="color:orange;">:</mark> <mark style="color:blue;">**Noon**</mark> now has a live points program, where holders of <mark style="color:purple;">**USN**</mark> and <mark style="color:purple;">**sUSN**</mark> are rewarded for their token balances and on-chain activity. Points accrue **in real time** and are displayed directly within the <mark style="color:blue;">**Noon**</mark>**&#x20;dapp**. These points serve as the primary mechanism for early community participation. When the <mark style="color:blue;">**Noon**</mark> governance token TGE took place in **Q2 2025**, all participants became able to convert their earned points into <mark style="color:green;">**$NOON**</mark>**&#x20;tokens**.

<mark style="color:orange;">**Point boosts**</mark><mark style="color:orange;">:</mark> Users will be able to "boost" the points they receive by participating in activities with our partners, like providing <mark style="color:purple;">**USN**</mark> and <mark style="color:purple;">**sUSN**</mark> liquidity on DEXes, or depositing <mark style="color:purple;">**USN**</mark> as collateral on lending protocols.

<mark style="color:orange;">**Token boosts**</mark><mark style="color:orange;">:</mark> When converting points to tokens, users will be able to choose to stake their tokens for up to 12 months to receive significant additional token rewards.

[^1]: Token Generation Event