We propose adding support for USDN (Noble’s native yield-bearing stablecoin) to the MASP!
TLDR: USDN is a yield-bearing stablecoin, and is mechanically similar to other productive stable assets that generate yield (short-term U.S. Treasuries). However, as a native IBC-enabled asset, USDN can easily integrate with Namada without a new IBC channel. Supporting USDN would make it the first yield-bearing stable asset in the MASP - enabling real yield on shielded stablecoin deposits and laying the groundwork for future experiments around composable yield and potential revenue sharing models.
Background
This idea’s been kicked around in other community spaces (Validator Circle/Bonfire), and people have been really supportive. Posting here so everyone who mainly follows the forum has a chance to weigh-in too.
Reasoning
Adding USDN to the MASP introduces the first stable asset to Namada that generates real yield. This marks an important step in expanding the economic functionality of shielded assets beyond simple storage, transfer, or staking. It also opens the door to a potential revenue model for Namada if the protocol were to capturing a portion of the underlying yield. This could also serve as an early framework for other productive assets within the shielded set (something we’ve really enjoyed thinking about!).
Rationale
We want to test and validate how yield-bearing assets can function within Namada. Introducing USDN seems like a low-risk, technically straightforward way to explore both composable yield and revenue alignment. It also offers an opportunity to experiment with how users can easily use USDN within Namada, helping identify the most effective ways to integrate productive assets into a shielded experience. Over time, composable yield could also enable new forms of builder creativity - opening the door for applications that leverage private, yield-bearing assets as core building blocks!
Quick note: If USDN is added to the MASP, it should also be whitelisted for gas (consistent with other supported assets).
speaking for Knowable, we’re excited about this–it could be complementary revenue to fee capture. If we take fees when shielded pool assets come and go, we could also potentially take fees on yield.
our impression is that participants of the recent Bonfire and Validator Circle discussions are supportive of advancing USDN support.
Knowable has been testing USDN on Housefire testnet, and things look good to go to whitelist USDN on Namada mainnet.
Maybe I’m being dense here, but how exactly does this work? Would your usdn balance on Namada increase as yield is paid? Is this even technically possible? I’m missing details of exact mechanism in proposal and in the links supplied. (not looking to shut this down, but curious exactly how/where this yield is paid)
I support this proposal. I also haven’t quite figured out the mechanism for calculating interest in USDN and how it will work with IBC transfers. But I am confident in the team’s vision. If someone could describe the detailed mechanism, explaining at what stages USDN rewards are calculated, that would be great
good question! i asked Heliax about this, and my understanding is that depositors will get shielded set rewards in NAM, and the Namada PGF address will get the USDN yield
the first step is to enable USDN and then see if we can get a product flow that makes it easy to use
I’m not sure I understand the attraction from the user pov if the USDN native yield is forfeited when shielding. Though I don’t mind having as many assets as possible in the masp.
Hashes match on both governance proposal (