Is Noon Safe?
Risk Grade: C (45/100)
Noon is rated as elevated risk — multiple novel mechanisms and notable interaction risks.
Moderate-high risk — Ethena-style delta-neutral yield stablecoin with proof-of-reserves transparency, but carries inherent CEX counterparty risk and vulnerability to prolonged negative funding rate environments
Noon is a yield-bearing stablecoin protocol that lets users deposit USDT or USDC to mint USN, a stablecoin backed 1:1 by the deposited assets. The protocol deploys collateral into delta-neutral trading strategies (buying spot crypto while shorting the same amount in perpetual futures) to generate yield, with 80% of returns distributed to sUSN stakers. With approximately $31M in TVL, Noon follows a similar model to Ethena's USDe but with added transparency through live proof-of-reserves via Accountable. While the delta-neutral approach can generate attractive yields during normal markets, it carries significant counterparty risk from centralized exchanges and can become unprofitable during bear markets.
TVL
$31M
Mechanisms
7
Interactions
4
Value Grade
C-
Key Risks for Noon Users
Noon's yield comes from trading positions held on centralized exchanges. If an exchange fails (like FTX did in 2022), the collateral backing USN could be lost, causing USN to depeg from $1.
During bear markets, the delta-neutral strategy can lose money instead of generating yield. In that scenario, sUSN holders earn nothing and may face a rush to exit that strains protocol liquidity.
The protocol has no governance token yet and operates with centralized strategy management. Users trust the Noon team to manage trading positions and maintain USN backing responsibly.
Top Risk Factors
- •USN's delta-neutral yield strategy relies on off-chain or semi-on-chain trading positions. If counterparty exchanges fail (FTX-style collapse), underlying collateral generating yield could be lost while USN remains in circulation.
- •The protocol mints USN equivalent to 80% of daily returns for sUSN holders. If the delta-neutral strategy underperforms or generates losses, the yield distribution mechanism could create a mismatch between USN supply and backing.
- •As a yield-bearing stablecoin protocol with a points program, Noon follows the Ethena/USDe pattern — a design that concentrates funding rate and basis trade risk in ways that can unravel rapidly during prolonged negative funding periods.
Risk Score Breakdown
Noon's highest risk area is Track Record (10/15). Here's how each dimension contributes to the overall 45/100 score:
Read the Full Noon Risk Report
This protocol has 2 collapse scenarios. 1 critical and 1 high-severity interaction risks identified. See the full mechanism classification, interaction matrix, and deep-dive recommendations.
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