Introduction

Traditional stablecoins like USDT or USDC do not generate yield for their holders. These stablecoins are backed by US Treasury Bills, where the issuer (Tether, Circle) keeps the interest on these bonds.

Instead of retaining the treasury yield, issuers of yield-bearing stablecoins (YBS) - such as Noble Dollar - pass it on to their holders. In an era of positive real interest rates, YBSs are designed to make money work for the user and not just the issuing company.

While fiat-backed stablecoins still dominate - accounting for nearly 90% of the total market supply) - YBSs are gaining steam.  The cumulative market cap of the top 10 YBSs currently stands at ~ $11B, which is roughly 4.2% of the total stablecoin supply.

What is USDN?

Noble Dollar (USDN) is a YBS launched in March this year. It is fully backed by short-term U.S. Treasury bills, and holders accrue yield automatically - no staking or lockups required. As of August 2025, USDN’s variable APY is ~4.29%.

What differentiates USDN from other YBSs is that not only do users of USDN get yield by simply holding it in their wallets, but the yield can also be sent cross-chain to other networks that integrate USDN. See here to learn more about USDN’s cross-chain yield capabilities.

For instance, networks such as Osmosis, Neutron, and Sunrise have integrated USDN, which allows holders of USDN on these networks to also receive yield, which is sent from Noble via cross-chain protocols like Hyperlane and IBC.

Early traction

Despite USDN being a relatively new YBS, its growth metrics over the first five months have been noteworthy:

• Reached $100M circulating supply within 87 days of launch

• $1.5M yield paid out to 30K holders of USDN

• 10.5K Average Monthly Active Users

• $500M in total swap volume

DeFi applications for USDN

Currently, USDN can be deposited into Noble’s Points Vault to receive points, which will be redeemable for AppLayer’s native token. See here to learn more about the ongoing S2 of USDN’s Points Program.

The points vault will soon transition to an actively managed Hyperliquid vault, providing an opportunity for users to receive additional yield on top of the base ~4% that USDN generates.

With the launch of AppLayer (scheduled for early next year), USDN will be the flagship stablecoin on the network, providing access to deep liquidity and more yield-generating opportunities.