4. Layered insurance coverage

Noon’s capital protection framework mirrors the layered security models of traditional finance, combining multiple lines of redundancy to safeguard user assets and yield. Our insurance approach covers on-chain smart contract risks, off-chain custodial exposures, and platform-level volatility, providing peace of mind without eroding returns.

1. DeFi Deployment Insurance

• Provider: Nexus Mutual

• Objective: Mitigate smart contract risk in DeFi deployments

All Noon DeFi strategies are protected by on-chain insurance coverage provided by Nexus Mutual, Web3’s leading decentralised insurance protocol. Noon also strategically divides deployments across independent DeFi protocols with minimal code overlap to reduce correlated smart contract risk.

All scaled DeFi deployments are fully protected by on-chain insurance coverage from Nexus Mutual, Web3’s leading decentralized insurance protocol. Noon also spreads capital across independent DeFi platforms with minimal code overlap to limit correlated smart contract risk.

For small testing deployments (specifically those below half the size of the Noon Insurance Fund, mentioned under point 3) coverage may be temporarily omitted. This exception applies only to limited test-size positions; all meaningful, scaled deployments remain fully insured.

Scale advantages: Noon’s deployment scale allows access to institutional-grade coverage at a reduced cost, enhancing protection without impacting yield.

On-chain verifiability: All DeFi insurance coverage is public and auditable.

2. Custodial Insurance

• Partners: Dinari, Alpaca

• Objective: Mitigate counterparty risk for off-chain and tokenised traditional assets

The majority of assets that reside outside CeFi or DeFi, including U.S. Treasury Bills, CLOs, and similar holdings are held via Dinari, who custodies all assets with Alpaca, a regulated U.S. broker-dealer.

This ensures that off-chain or tokenised assets are protected with regulated insurance coverage comparable to institutional custodial standards.

Regulated counterparties: Assets are custodied under licensed U.S. institutions, providing institutional-grade risk mitigation.

3. Noon Insurance Fund

• Objective: Absorb strategy-level volatility and cover non-insurable events

The Noon Insurance Fund is a self-managed, platform-level safety net designed to enhance yield stability. Part of performance yield is allocated to this fund to protect user returns during periods of strategy-level volatility or non-insurable tail events.

For a detailed breakdown of yield flow and fund mechanics, see: - Return Distribution & Insurance Fund

Key Takeaways

• Multi-layer protection: protocol, custodial, and platform-level coverage

• On-chain verifiability: all DeFi insurance is public and auditable

• Regulated counterparties: majority of off-chain assets custodied under licensed U.S. institutions

• Internal yield reserve: Noon allocates part of performance yield to protect user returns

Insurance Layers Summary

Layer	Provider / Source	Primary Coverage
1. DeFi Deployment Insurance	Nexus Mutual	Smart-contract exploits or protocol vulnerabilities
2. Custodial Insurance	SIPC + Lloyd’s of London (via Dinari / Alpaca)	Custodian default or insolvency
3. Noon Insurance Fund	Internal reserve, funded by share of gross protocol returns	Volatility and non-insurable tail events

Outcome: Protection from both on-chain and off-chain risks, without eroding yield.