Should you hold USN or sUSN?

Brief introduction to our stablecoin (USN) and staked stablecoin (sUSN)

We know our users will come in all shapes, sizes, and risk appetites. And we wanted to ensure that Noon has a solution, a deployment strategy, for all.

1. USN: The “Moonshot” deployment strategy

USN is the core of Noon. It is our unstaked stablecoin and pegged 1:1 to USD. Its holders do not receive any of the raw protocol yield. Instead, we reward holders of USN with our $NOON governance tokens.

• Permissioned users can mint (and redeem) USN via our dApp, using (to) USDT or USDC, with more currencies to come.

• Everyone else can buy (and sell) USN on decentralised exchanges, which can be accessed via our app.

Permissioned or otherwise, holding USN will appeal to users who are looking for a chance for high rewards - those looking to shoot for the moon.

The Moonshot

For USN holders: you’ll get several times the points (during the Public Beta) / governance token rewards (after the Public Beta) that sUSN holders receive. The $NOON governance token will be launched in late Q2 2025, and be an integral part of the protocol. We have developed a novel tokenomic approach for the $NOON token to ensure users have an excellent experience - holders of the $NOON governance token will have access to unique reward opportunities that will be made public in due course.

Downside protection

Not only will USN holders have the opportunity to earn disproportionately high rewards but, unlike most high-reward opportunities, deploying to USN will not come with a commensurately high risk. Since USN will be pegged 1:1 to USD, the downside for USN is limited. Users will be able to sell or redeem their USN for an equivalent USD value at all times - protecting their downside.

We have all seen several protocols that make a similar promise - both in the distant and recent past - with “problematic” follow through. This is why we’ve been planning, from early in our Public Beta, to have a third party providing real-time Proof of Solvency publicly. We think this will be critical to users being comfortable with Noon - and will be the only way to show how truly safe our operations are.

Sustainable strategy

Typically, when comparable protocols have adopted a similar reward mechanism for their unstaked stablecoin, they have boosted rewards in the first year alone - rewards in subsequent years have tapered dramatically. This is typically because, while they want to make a big bang out of the gate with large token rewards, they do not have enough tokens allocated to users to continue this much beyond a year. Since we are able to allocate 65-80% of our governance tokens to users, we’re able to maintain significant $NOON rewards to USN users for several years. So we do not expect to see a dramatic drop-off in USN holders from Y1 to Y2, as you may have seen in other similar protocols - which allows sUSN returns to remain higher for longer. For details on why rewarding USN for longer allows sUSN returns to remain high, please see the “Sustainable return boost” section below.

2. sUSN: the “Stable” deployment strategy

sUSN is the way that users can get access to the returns generated by our delta neutral strategies.

Users can stake USN into a staking pool. They receive sUSN, which represents a share of the USN in the staking pool. As our strategies generate return, additional USN are minted directly into the staking pool to ensure Noon is 100% collateralised. Every time this happens, the value of each sUSN increases, as each sUSN holds the same share of a larger number of USN.

Highest through-cycle raw returns

When we say “raw returns”, we refer to the base returns our collateral receives from our collateral deployment strategies. We are confident that these returns will be among the highest through-cycle raw returns of any stablecoin project. More information can be found in our Mirror post here, where we talk about the intelligence of our return strategies and why it matters (spoiler: in part because it leads to highest through cycle-raw returns).

Sustainable return boost

To get to the APY of sUSN, our raw returns receive a boost. This boost comes from our USN holders, who forgo their share of raw returns in favour of additional governance tokens. Simply put, in exchange for governance tokens, USN holders cede their raw returns to sUSN holders. In similar protocols, staked stablecoin returns have been boosted by 1.5x to 2.0x (compared to raw returns) in the first year, when these protocols have rewarded their unstaked token holders heavily.

Most similar protocols cannot offer heavy governance token incentives to users for longer than 1 year. Since Noon has been able to avoid selling tokens to VCs and other investors, we have been able to reserve 65-80% of our total token supply for distribution to users. That’s why we can offer significant token rewards to our USN holders for a longer period of time, which in turn boosts sUSN returns for that duration.