Noon aims to be web3’s most intelligent and fair stablecoin, maximising both through-cycle yield and rewards to our users. What you’re about to read focuses on the former: our intelligence, and why it may matter to you. We’ll share more about the latter (our fairness), as well as our larger vision, in the coming weeks.

TLDR

Noon intelligently allocates collateral between a basket of safe, conservative, delta-neutral strategies in a low-risk manner. This allows us to out-perform across all market conditions - and allows our users to simply use our stablecoin as their preferred means of currency - as their base currency - rather than worrying about rotating between assets / protocols to optimise yield.

Details

Three of the critical pillars of a successful yield-generating stablecoin are as follows:

• That it does not lose value: a stablecoin is expected to maintain its value. Any downward volatility would be severely detrimental - which means that any return strategies with associated risk cannot be considered. This is a condition precedent - a necessity to be considered a yield-bearing stablecoin.

• That it is highly liquid: a stablecoin requires high levels of liquidity and relatively rapid redemption windows.

• That it generates the highest through-cycle yields: this goes without saying - yields must be consistently high through the economic cycle, and not wholly reliant on any single strategy (like deposits into U.S. Treasury Bills) which underperforms in specific market conditions. This may not be a necessity to be considered a stablecoin, but will, in the long term, be what ensures survival in a competitive stablecoin market.

These pillars constrain the deployment strategies that a yield-bearing stablecoin can and should  consider.

1. Deployment strategies

There are two primary sources of yield that web3 stablecoin protocols have adopted, but both are suboptimal from a through-cycle yield standpoint.

• Deployment into U.S. Treasury Bills: Annual yields on U.S. Treasury Bills typically range between 0% and 5%. While considered low-risk, this deployment strategy leaves a lot to be desired during low-interest rate environments.

• Deployment into Funding Rate Arbitrage Strategy: Annual yields on the funding rate arbitrage strategy can range from -10% to +30%. This strategy performs well in many market conditions, but can yield low to negative returns for sustained periods of time (see below).

Of course, other deployment strategies have been adopted by stablecoin protocols, but all have come with their own drawbacks. For example, deployments into corporate bonds can improve yield at certain points in the cycle, but can lead to liquidity issues in moments of stress, when lack of liquidity can be fatal.

So, if individual deployment strategies are all suboptimal, what can we do?

2. Noon’s way forward

Noon intelligently allocates across a basket of safe and secure, delta-neutral strategies to maximise “through-cycle” yield for our users. Why? Because our goal is to be your base currency - the equivalent to cash in your wallet or your native currency in your bank account - that you hold and spend. A dual-purpose asset which is both liquid and generates yield.

We don’t want you to worry about optimising your returns on your base currency. It sounds painfully time-consuming to:

1. Have to switch your liquid assets into funding-rate backed stablecoins when the funding rate is high

2. Then re-allocate to treasury-bill backed stablecoins when funding rate drops in a high-interest environment

3. And later, perhaps cycle into a third asset when neither of the above are generating reasonable returns

Rather, you should be able to “set it and forget it”. Your base currency, in this day and age, should be able to generate stable yield without any management from you. In other words, it should be able to intelligently switch between a basket of delta-neutral strategies and generate the highest, low-risk yields possible in all market conditions. And you ought to be able to use this currency, while it continues to generate yield, to borrow against, to spend, invest, or generate yield in some other way.

This is precisely what we have built at Noon. Our users – you – can use our stablecoin (USN) or yield-bearing staked stablecoin (sUSN) to simultaneously (a) earn returns, and (b) continue to spend or invest onwards as traditional currency. Those with a low-risk appetite can simply hold USN / sUSN and accrue the yield - and those with higher return targets and / or a higher risk appetite can use it across web3 to compound their gains.

Currently, we intelligently allocate across the U.S. Treasury Bills and the Funding Rate Arbitrage deployment strategies, as these are the best-understood delta-neutral strategies available at scale. Over the coming months, we will introduce a variety of new safe, secure delta-neutral strategies to deploy potions of our collateral into - truly giving our users reassurance that our deployment strategies will outperform safely in any market.

3. Get involved: be early, be part of Noon

At Noon, we are not just creating a stablecoin—we are building the groundwork for your financial independence. Our vision goes beyond delivering consistent, through-cycle yield: we are building the future of a truly adaptive base currency, one that works smarter for everyone, everywhere.

This is where you come in. We believe the best foundations are shaped by the communities they serve. That’s why we want you to help guide Noon’s growth, from contributing ideas to voting on the deployment of new strategies. Together, we will expand our basket of safe delta-neutral strategies, making Noon the most resilient and rewarding stablecoin in any market condition.

Join us as we make Noon the stablecoin you can trust, in the vast sea of web3, to grow and adapt through any economic cycle. Let’s create a currency that doesn’t just keep up with change—it thrives on it.

The next chapter in stablecoin evolution is here. Be part of Noon.

Disclaimer:* The information provided in this article is for informational purposes only and does not constitute financial advice. We do not endorse or promote the purchase of any cryptocurrency or digital asset. Readers are encouraged to conduct their own research.*