# Tokenomics ## TL;DR **Noon** has built the most user-friendly tokenomics system in web3, designed to: 1. Maximise **$NOON** **token allocation** to users: 65-80% to users 1. Among users, **prioritise distributions to long term users and holders**, as opposed to short term sellers 2. Ensure all token distribution is done **transparently**, and over as **long of a term** as possible 3. **Maximise** the **value** of holding **$NOON** 1. Allow holders ultimate control over the protocol 2. Distribute real value, real returns, to users At every decision point, we asked ourselves, "*How can we make the tokenomics as favourable to our users as possible?*". We think we've been able to deliver on our ambitious goals. ## 1. Token allocation We aim to allocate as many **$NOON** tokens to users as possible. The **$NOON** governance token allocation is very simple (figure 1). * **65% is allocated to the ****Noon**** Community Fund.** This is the fund which distributes tokens to users of the Noon Protocol, based on their holdings and activity within our protocol. * **15% is allocated to the ****Noon**** Ecosystem Fund.** This is the fund which is used by the **Noon** Foundation to accelerate the growth of the **Noon** Protocol. We will aim to also distribute this to **Noon**'s users. * **20% is allocated to ****Noon****'s team.** This will be distributed to the **Noon** team. *More details on this in Section 3.*

Figure 1. Noon governance token ($NOON) allocation

There is an absence of **investors** and **early LPs** (with preferred terms) on the token allocation table to date. These are two groups which typically receive a significant token allocation from most (stablecoin) projects. **Noon**** has 0 ****$NOON**** tokens allocated to both.** * **Noon** is **self-funded**, and has no plans to take on external investment at this time. * **Noon** has grown its TVL **organically**, and has not relied on preferential deals with early LPs Both of these mean that we can maximise $NOON token distribution to you, our users. While most comparable projects allocate between 10-30% of governance tokens to users, **Noon**** will distribute between 65-80% of governance tokens to our users** (figure 2)**.**

Figure 2. Governance tokens allocated to users

### 1.1. Token distribution: prioritise long term users and holders After ensuring that we maximise distributions to our users, we then wanted to ensure that our long term users and holders were receiving the highest rewards. This is why we developed unique staking reward mechanisms and a bespoke vesting curve for governance token rewards. #### Active Staking **Active Staking is currently live on Noon.** This refers to users who earned **$NOON** through holding our stablecoins (**USN** & **sUSN**), or using either across our partner protocols. These users each earn an initial allocation of **$NOON** on a monthly basis, which can be increased by staking this **$NOON** for up to 12 months. #### Open Staking **Open Staking is coming soon to Noon.** This will be available to users once the **$NOON** token is transferable - and available to buy and sell on CEXes and DEXes. Open staking will allow users who have bought **$NOON**, or any other users ineligible for Active Staking, to also receive additional **$NOON** by staking in the Open Staking pool.*More details on Open Staking to be disclosed closer to **$NOON** transferability (coming soon).* #### Staking Rewards Curve Both Active Staking and Open Staking will share the same Rewards curve. This will be an exponential curve, to emphasise the rewards to long term users. The curve will follow the function in figure 3.

## 2. Long term, transparent token distribution We aim to distribute our governance tokens transparently, over as long of a period as possible. ### 2.1. Community Fund Distributing the 65% of governance tokens in our Community Fund should not be done overnight - or in a year or two, which is how other comparable protocols choose to distribute their governance tokens. **Instead, we can distribute our Community Fund to users over 8 years, or longer** (figure 4)**.**

Figure 4. Noon v Comparable Protocols: Governance Supply Distribution

This increases incentives for Noon users, specifically for holding **USN**, our non-yield bearing asset. This is important for all our users to understand. One of the ways we are able to offer higher APYs than comparable protocols is because we reward **USN** holders with **$NOON** rewards disproportionately (compared to **sUSN** holders). This incentivises holding **USN**. And as **USN** holders forgo the yield earned by their holdings in favour of sUSN holders, **this boosts sUSN yields.**\ \ **The longer we can incentivise USN holders with ****$NOON**** rewards, the longer we can sustain our boosted** sUSN **yields.** We've seen comparable protocols lose similar yield boosts immediately after they reduce governance token emissions - **we are fortunate that we're able emit governance tokens for 8+ years, to sustain this yield boost for significantly longer than others** (figure 5)**.**

Figure 5. Noon Community Fund distribution, by year

This will be done transparently, from the following wallet.\ \ **Noon**** Community Fund wallet:** [Contracts and addresses](/additional-resources/contracts-and-addresses.md) ### 2.2. Ecosystem Fund The Ecosystem Fund is set up to allow the **Noon** Foundation the ability to promote ecosystem growth. This has been unlocked at TGE (in July 2025). All distributions from the Ecosystem Fund will be proposed by the **Noon** Foundation, and be disclosed to the **Noon** community in a timely manner.\ \ **Noon**** Ecosystem Fund wallet**: [Contracts and addresses](/additional-resources/contracts-and-addresses.md) ### 2.3. Team allocation All tokens in **Noon**'s Team allocation (20% of total token supply) will be vesting over 7 years - an initial 1-year cliff, followed by 6 years of linear, monthly vesting. This compares favourably to comparable protocols, which have team vesting periods ranging from 18 months to 4 years.\ \ \ We chose a market leading vesting period because we understand that **Noon**'s vision is long-term, and cannot be achieved by the team while adhering to a standard vesting schedule. This aligns the team most closely with users. ## 3. Maximise the value of holding (and staking) $NOON As part of our tokenomics exercise, we also wanted to ensure we considered how we could increase the value of holding **$NOON**. ### 3.1. Governance utility **$NOON** is the governance token of the **Noon** Protocol. Its primary purpose is to ensure that control of key protocol decisions sit with long-term users, rather than external investors or short-term participants.Holders (specifically, stakers) of **$NOON** will be able to participate in governance decisions including, but not limited to: * Protocol parameters and risk limits * Deployment strategies and counterparty selection * Adjustments to token emissions and incentives Governance power is intentionally concentrated among long-term users. Since the majority of **$NOON** is distributed to users over an extended period, governance authority naturally accrues to those whose incentives are most closely aligned with the protocol’s long-term success. **Additionally, long-term stakers of ****$NOON**** receive increased governance voting power, further amplifying the influence of committed participants.** ### 3.2 Raw Returns to **$NOON** holders Noon is designed to maximize the long-term value of holding and staking **$NOON**. A meaningful share of protocol value flows to **$NOON**** stakers** (via the Noon Insurance & Operations Funds), aligning governance participation with sustainable protocol growth and prudent risk management. There are two primary mechanisms through which raw protocol returns accrue to **$NOON holders**: #### **Insurance Fund** * **10% of raw protocol monthly returns** are allocated to the Insurance Fund. * These funds are **seasoned for 12 months** to ensure adequate protection against adverse protocol events. * After the 12-month seasoning period, these funds are used to buy back **$NOON** tokens from the market. * The bought-back **$NOON** is then distributed pro-rata to **$NOON** stakers. This structure creates a direct yield stream for **$NOON** stakers, while simultaneously incentivising responsible governance and risk oversight. #### **Operations Fund** * **10% of raw protocol monthly returns** are allocated to the Operations Fund. * The Operations Fund is used to cover **ongoing monthly operating expenses**, while maintaining a **reasonable operating buffer of 12 months runway**. * If there is enough surplus in the Operations Fund (above the 12-month runway), any excess is swept into the **Insurance Fund monthly.** * This surplus then follows the same process as all other deposits into the Noon Insurance Fund: **seasoned for 12 months**, then used to buy back **$NOON**, which is **distributed to stakers.** This ensures that protocol revenues are used efficiently and that **any surplus value is returned to the community**, rather than accumulating at the protocol level. ### 3.3. **$NOON** Buybacks: Enhancing Holder Value We have described above how we minimise sell-side pressure of **$NOON** with our distribution schedule (section 2). But we also have a compelling buy-back program to build significant buy-side pressure for **$NOON**. Distributions from the Insurance Fund and the Operations Fund (see 3.2) are distributed to staked **$NOON** holders via the following mechanism: * Funds in both the Insurance Fund and the Operations Fund are held in USDT or USDC * These funds are used to buy back **$NOON** on the open market * $NOON is then distributed to **$NOON** stakers (pro-rata) *N.B. This **$NOON**, once distributed to **$NOON** holders (stakers), is eligible for Open Staking (section 1.1), incentivising the ongoing staking of these **$NOON** tokens as well.* ## Summary By combining long-term governance ownership, extended token vesting, and direct participation in protocol returns, **$NOON** is designed to represent real, durable ownership in the **Noon** Protocol. Every component of the system is structured to reward users who contribute to **Noon** over the long term, rather than short-term speculators. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.noon.capital/noon-the-basics/tokenomics.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.