Asset custody

Below is an overview of our current deployment strategies and the corresponding custody arrangements.

Deployment Strategy 1: Tokenised Treasury Bills

Our tokenised treasury bills are held by a licensed broker, Alpaca Securities, via our RWA partner, Dinari.

• Regulatory Compliance: Alpaca is a member of the Financial Industry Regulatory Authority (FINRA) and SIPC.

• Insurance Coverage: Alpaca maintains excess insurance coverage through Lloyd’s of London, supplementing SIPC protection.

This structure ensures that our holdings in tokenised Treasury Bills are secure and compliant with regulatory standards.

Deployment Strategy 2: Funding Rate Arbitrage

All collateral deployed to the Funding Rate Arbitrage strategy is held off-exchange and settled via tri-partite settlement agreements, isolating funds from exchange-related risks.

We utilise established Web3 custodians like Ceffu, who manage billions in assets for top Web3 institutions globally, providing additional security and reliability.

New Strategies in Our Deployment Basket

Through community discussions and votes in our Governance Forum, we have added the following low-risk strategies to our deployment basket:

1. Collateralised Loan Obligations (CLOs)

• Investment: Allocated capital to Janus Henderson’s JAAA.

• Asset Class: Structured credit instruments backed by diversified pools of corporate loans.

• Benefits: Historically delivered returns above Treasury bills with low volatility, strong liquidity, and robust institutional participation.

2. Private Credit Funds

• Investment: Allocated capital to Fasanara’s Fintech Tactical Credit Fund (F-TAC).

• Asset Class: Short-duration, fintech-originated private credit assets such as SME loans, consumer credit, and trade receivables.

• Benefits: Leverages data-driven underwriting and diversified exposure across loan originators to generate consistent yield with low correlation to traditional markets and limited duration risk.

3. DeFi Lending

• Platforms: Deploying assets into top-tier lending protocols like Euler and Morpho.

• Strategy: Vaults curated by reputable vault curators.

4. Buying Principal Tokens (PTs)

• Platform: Pendle.

• Strategy: Purchasing Principal Tokens to lock in fixed returns of up to 10–20% APY, with liquidity, transparency, and strict risk controls.

Strategies Not Included in Our Deployment Basket

After evaluation and community voting, the following strategy was not added to our deployment basket:

Business Development Companies (BDCs)

• Reason: Voted against due to higher volatility associated with this asset class.

Future Deployment Strategies

For any future deployment strategy, asset custody and security remain our core focus. We will only deploy funds when we can ensure assets are secure and segregated.

As a stablecoin, we recognise that even a single black-swan event in a self-custodial environment can cause irreparable harm. Noon’s approach mitigates this risk by prioritizing secure, regulated custody at every stage.

Additional Resources

For more details on all deployment strategies, including Collateralised Loan Obligations (CLOs), Private Credit Funds, DeFi Lending, and Principal Tokens, visit our Deployment Strategies page.