Islamic Finance Principles Assessment
Riba — Does Noon USN involve interest?
Noon USN's core revenue model is built on interest-bearing instruments — Treasury bills, CLOs, private credit, and DeFi lending — making riba a central and unavoidable feature of how value accrues to token holders. While delta-neutral funding-rate arbitrage adds a derivatives layer, the underlying treasury strategy remains anchored in conventional interest income. For Muslim investors, this represents a significant structural concern rather than an incidental one.
Assessment: Riba Dominant
Score: 24/100
Our methodology examines 10 criteria to evaluate how well Noon USN avoids interest-based mechanisms.
USN's 1:1 backing consists of USDT, USDC, or short-term US Treasury bills — the latter being explicitly interest-bearing government debt instruments, not gold or halal real assets. The protocol's revenue engine deploys this collateral into tokenized T-bills, CLOs, private credit, and conventional DeFi lending markets (Morpho, Euler), alongside funding-rate arbitrage. This is not incidental exposure through third-party dApp usage; it is the native strategy engine generating the 80/10/10 revenue split. The reliance on interest-bearing debt instruments as a primary yield source is a direct riba concern embedded in the protocol's own design.
Rewards flow through staking: USN holders staking into sUSN receive 80% of raw protocol yield, itself sourced substantially from interest-bearing instruments. This yield is variable and performance-based rather than a fixed guaranteed rate, which is structurally preferable to classic riba — sUSN's value depends on actual strategy performance, not a promised interest rate. However, the underlying income source remains interest-based even though the distribution mechanism is variable. NOON governance-token rewards follow a non-linear vesting curve favoring long-term commitment, but this vesting structure does not change the interest-tainted nature of the underlying yield being distributed.
Gharar — How much uncertainty does Noon USN involve?
Uncertainty in Noon USN is moderate: documentation, contract addresses, and audit reports are public, reducing informational gharar, but founder identity verification and open-source licensing remain unconfirmed in available sources. The permissioned, whitelisted minting process for institutions versus DEX-only retail access also introduces a layer of structural opacity for ordinary users. On balance, transparency is reasonably good but not complete.
Assessment: Moderate Gharar (Material Uncertainty)
Score: 51/100
Our methodology examines 15 criteria including team transparency, audit quality, and governance.
Founder Arpan Gautam is named publicly and described with a detailed professional background (ex-McKinsey, ex-Goldman, Wharton), but this biography is self-reported and not independently corroborated by a verifiable primary profile in available sources — several LinkedIn search results retrieved actually belong to unrelated individuals and companies sharing the "Noon" name. Contract addresses and GitBook documentation are disclosed publicly, which supports transparency, but explicit open-source licensing of the codebase is not confirmed. This partial verification is a moderate gharar factor investors should weigh.
Noon USN has been audited twice by named, reputable firms: Quantstamp (September 2024) and Halborn (December 2024 and March 2025), with reports published. This is a meaningful gharar-reducing factor, distinguishing the project from unaudited protocols. Reward mechanics, vesting curves, fund splits, and collateral composition are documented in detail across public sources. However, no source addresses an Islamic-contract classification for the staking model, and the permissioned/whitelisted institutional minting process versus DEX-based retail access is not fully explained, leaving some structural terms less than fully transparent to retail participants.
Maysir — Does Noon USN involve gambling or speculation?
Noon USN is not designed as a gambling or speculative instrument; it functions as a stablecoin-and-yield system built on real collateral and defined strategies. Genuine utility in payments, treasury management, and yield generation distinguishes it from zero-sum speculative products, though secondary-market trading behavior around any liquid token can introduce speculative elements beyond the protocol's control.
Assessment: Moderate Maysir (High Risk)
Score: 52.3/100
Our methodology examines 11 criteria to determine whether Noon USN is a gambling instrument or a genuine economic tool.
USN and sUSN serve a genuine economic function: USN provides a stable medium of exchange and settlement pegged to fiat-equivalent value, while sUSN offers a mechanism for capital to earn a share of real, disclosed treasury returns. The protocol's delta-neutral arbitrage, T-bill allocation, and lending strategies represent productive, revenue-generating activity rather than a zero-sum betting mechanism. NOON governance rewards are earned through protocol engagement rather than purchased speculatively, reinforcing a utility-first design rather than one built around chance or wagering.
Against this genuine utility must be weighed the realities of a low-liquidity market: roughly $27.8 million market cap and thin daily volume near $143,000 create conditions where secondary-market price action can be volatile and speculative, independent of the protocol's own fundamentals. Such trading behavior by third parties is common across the crypto market and does not reflect a design flaw in Noon USN itself. The protocol's anti-speculation vesting curves for NOON rewards, requiring 12+ months for full allocation, further suggest the design actively discourages short-term speculative extraction in favor of longer-term participation.
The Full 27-Point Screening
1. Legitimacy (4 criteria)
| Criterion | Score | Analysis |
|---|
| Team Transparency | 45/100 | The founder is named with a described finance background in interviews, but no independent, verifiable profile for him specifically appears among these sources, and unrelated "Noon"-named individuals are conflated in the search results. |
| Fraud & Scam Risk | 60/100 | No fraud, hack, or rug-pull evidence tied specifically to Noon Capital appears in the sources, but this is an absence of adverse findings rather than a confirmed clean record; unrelated SEC actions retrieved do not concern this project. |
| Use Case Legitimacy | 75/100 | The sources describe a functioning yield-bearing stablecoin with a clear real-world use case (dollar-pegged payments/store of value plus yield), not a hype-only token. |
| Ethical Practices | 15/100 | The protocol's own design deploys collateral into interest-bearing and lending-based instruments (T-bills, CLOs, private credit, conventional DeFi lending), which is a self-designed feature rather than third-party misuse. |
Summary: The founder is named and described with a finance-industry background in interview sources, but independent verification is limited and search results conflate the project with unrelated similarly-named ventures.
2. Project Operations (9 criteria)
| Criterion | Score | Analysis |
|---|
| Core Protocol Business | 15/100 | The base protocol's core business is generating yield via interest-bearing and lending instruments, placing its own core function in an interest-based financial sector. |
| Transaction Fees | 50/100 (low evidence) | The sources describe yield-distribution splits (80/10/10) but do not specifically describe how ordinary transaction fees (e.g., minting/transfer fees) are handled, so this could not be established. |
| Treasury Assets | 10/100 | Treasury/collateral is explicitly described as including interest-bearing US Treasury bills and further deployment into CLOs, private credit, and DeFi lending. |
| Revenue Model | 10/100 | Revenue is generated primarily from interest-based instruments (T-bills, CLOs, private credit, lending markets) and derivatives-based funding-rate arbitrage. |
| Transparency | 55/100 | Documentation, audits and contract addresses are publicly disclosed, but explicit open-source licensing status of the code is not confirmed in these sources. |
| Governance | 45/100 | Governance exists via NOON/sNOON, but non-transferability until late 2025, whitelisted institutional-only minting/redemption, and a 20% team allocation indicate meaningful centralisation. |
| Launch Fairness | 70/100 | No VC or investor pre-allocation is reported, with the large majority of tokens reserved for users and a long team-vesting schedule, indicating a comparatively fair launch. |
| Token Distribution | 70/100 | Token allocation of 65% community, 15% ecosystem, 20% team (long vesting) is explicitly disclosed and skews toward broad user distribution. |
| Speculation/Utility Ratio | 60/100 | The stablecoin/yield use case is utility-oriented, though third-party leveraged "looping" vaults built on sUSN indicate a speculative layer around the ecosystem. |
Summary: Noon runs a dual-token stablecoin system (USN/sUSN) whose collateral is deployed into a mix of derivatives-based and explicitly interest-bearing/lending strategies, with a governance token distributed mostly to users but access to primary minting restricted to whitelisted institutions.
3. Financial Health (4 criteria)
| Criterion | Score | Analysis |
|---|
| Protocol Revenue | 10/100 | Protocol revenue is substantially sourced from interest-based instruments and lending markets rather than fee-for-service or profit-sharing in halal activities. |
| Financial Status | 50/100 | Reported figures show modest annualized revenue ($610K) and a small, thinly-traded market cap ($27.8M), indicating an early-stage but transparently reported financial position. |
| Interest Assessment | 5/100 | The protocol itself allocates treasury assets into interest-bearing bills and third-party lending markets as a core, native yield-generation activity. |
| Audit Quality | 80/100 | Named audit firms (Quantstamp, Halborn) with specific report dates (Sept 2024, Dec 2024, March 2025) are documented. |
Summary: The protocol's own revenue model is built substantially on interest-bearing instruments and lending markets, reported through modest, transparent, but thin-liquidity market metrics, with named third-party smart-contract audits on file.
4. Token Economics (5 criteria)
| Criterion | Score | Analysis |
|---|
| Token Purpose | 70/100 | NOON is described as a genuine governance-utility token earned through protocol participation rather than sold or marketed as a speculative meme asset. |
| Governance Rights | 55/100 | NOON/sNOON holders receive defined governance rights, though the token's transfer restrictions and permissioned market access limit practical decentralisation. |
| Rewards Distribution | 50/100 | sUSN rewards are variable and tied to actual delta-neutral yield performance, while NOON emissions follow a fixed, predetermined decay/vesting schedule. |
| Speculation Controls | 65/100 | Multi-year vesting for team tokens, 8-year community distribution, and 12+ month staking commitment requirements for full rewards demonstrate deliberate anti-speculation design. |
| Asset Backing | 30/100 | USN is backed by fiat-equivalents and interest-bearing US Treasury bills held custodially, rather than by halal real assets. |
Summary: NOON is a participation-earned governance token with long vesting and no VC allocation, while USN's backing includes interest-bearing government debt rather than purely halal assets.
5. Staking Mechanism (5 criteria)
| Criterion | Score | Analysis |
|---|
| Mechanism Type | 50/100 | Staking is accessed through the dApp (USN→sUSN, NOON→sNOON) with described lock-up/vesting terms, though underlying collateral custody arrangements and full non-custodial status are only partially detailed. |
| Islamic Contract Classification | 15/100 | The profit-share structure resembles a Mudarabah-like split, but its underlying revenue is substantially generated from interest-based lending and debt instruments, leaving the core contract classification contested. |
| Rewards Structure | 45/100 | Rewards derive from real yield activity (variable) but are also shaped by fixed target-APY marketing and a predetermined NOON emission/vesting curve. |
| Documentation | 75/100 | Staking mechanics, vesting curves, and reward splits are documented in detail across official docs and public statements. |
| Shariah Alignment | 15/100 | A decisive Shariah question remains unresolved because the yield underlying staking rewards is substantially generated through interest-based instruments (T-bills, CLOs, private credit, conventional lending). |
Summary: A native staking mechanism exists (USN→sUSN and NOON→sNOON) with documented lock-up/vesting incentives, but its reward source is tied to yield strategies that include interest-based lending, leaving its Islamic-contract classification unresolved.
Overall Assessment: Noon USN is a genuine, non-meme yield-bearing stablecoin project with reasonable transparency and fair-launch tokenomics, but its core revenue and treasury strategy rely materially on interest-based instruments, which is a decisive and unresolved concern for Shariah compliance.
Written by ThanvirFounder, Ex Director S&P Global Energy
Reviewed by Imam Omar SiddiqiShariah Scholar