Cosmos-based Noble's yield-paying USDN stablecoin goes live

Noble’s much-anticipated, yield-paying USDN stablecoin is live, the startup announced on Wednesday. The launch is accompanied by a new “points” campaign, offering users an alternative way to earn yield. 

USDN is part of an emerging trend of stablecoins designed to pay holders. The token programmatically directs the revenues it derives from holding short-duration U.S. Treasurys to the developers, app builders, validators, wallets and exchanges that support it, “creating a new model for incentive alignment,” the team writes.

This is a change from the dominant model of fiat-pegged cryptocurrencies like USDT and USDC, which print cash for their corporate backers but not users. Tether, for example, earned over $13 billion in profits last year based on the revenues generated by its reserve holdings, including U.S. government debt .

According to a press release, USDN holders could currently earn around 4.15% APY. However, those returns will adjust based on its Treasury bill collateral . The token will be supported initially in the Keplr Wallet and can be purchased with credit cards through Moonpay.

USDN was built using M^0’s $M protocol, a relatively new framework for launching customizable stablecoins. The Ethereum-based platform provides a “stablecoin extension engine” that enables developers to take M^0’s canonical stablecoin, $M, and use it as a sort of “turnkey middleware.”

The Noble points program, meanwhile, will center around two intertwined USDN Staking and Flexible vault. Depositors can lock up their USDN for up to four months in the Staking Vault, forfeiting their yield payments in return for points accumulation, while the Flexible Vault offers a “boosted” yield paid for by that forfeited yield. 

Noble is perhaps best known as the native asset issuance network for Circle’s USDC stablecoin in the Cosmos ecosystem. Over the past year, it has facilitated over $6.5 billion of stablecoin transfers across over 80 blockchain applications. Earlier this year, Noble and asset manager Hashnote partnered on a tokenized short-duration yield fund called USYC.