Token Transferability: Should $NOON gov token be transferable at TGE?

Governance Processes
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We are discussing a foundational decision: Should the Noon governance token be transferable at TGE?

This is a nuanced topic with technical, strategic, and community implications. We encourage all participants to read the context below, share their perspectives, and help weigh the trade-offs — especially as they relate to our protocol’s values and long-term integrity.

Why limit transferability at launch?

We are currently leaning toward making the governance token (NOON) non-transferable at launch. This approach reflects our intention to anchor governance power in active participation, not capital accumulation. By doing so, we aim to:

  • Prevent vote-buying and governance capture: Transferable tokens can be easily accumulated by large capital holders, which may lead to plutocratic dynamics and governance decisions skewed toward short-term or extractive goals. A non-transferable token ensures that only real users get a say in protocol governance. An early period of non-transferability also allows users to test the governance mechanism in a low-risk way, to truly understand the impact of the governance token.
  • Reduce speculative pressure: Non-transferability minimizes early market hype or pump-and-dump behaviors, allowing governance to mature in a more mission-aligned and values-driven way.
  • Emphasize identity and contribution: Non-transferable tokens promote a governance system grounded in reputation, accountability, and long-term alignment — not just economic incentives.
  • Encourage organic growth of the community: In the early stages, we want decision-making to come from engaged builders, users, and contributors, to give a greater voice to those committed to the protocol’s development.

But what do we lose?

There are also meaningful trade-offs to consider with non-transferability:

  • Reduced composability: Non-transferable tokens are harder to integrate with DeFi protocols, tooling, and infrastructure that assume ERC-20-like behavior.
  • Limited liquidity and discovery: Markets help surface value signals and can attract contributors or visibility. Restricting transfers may dampen those signals in the short term.
  • Onboarding friction: Potential contributors may be less motivated if there’s no immediate financial upside or if governance power feels “locked.”

Our initial proposal

Our current thinking favours a phased roll-out:

  • Tokens are non-transferable at launch, but users will be able to earn governance rights via a locking mechanism.
  • Transferability is introduced later, after community norms and safeguards (like delegation, quorum rules, or reputation layers) are in place, and Noon is more established in the DeFi ecosystem. We aim for this to happen by the end of 2025 (est.)

At TGE, users will still be able to stake $NOON to access the following rewards (during the non-transferable phase):

  • Earn more $NOON airdrop via boosted staking rewards (with enhanced yields for 12-month stakers).
  • Gain voting power through -ve mechanics (vote-escrowed staking).
  • Collect real yield from protocol returns (via Noon Insurance Fund) (in $NOON).
  • Vote on protocol decisions in the Noon Governance Portal.

This hybrid approach could balance the need for early alignment with the eventual goal of open, liquid governance.

How to engage

Keep replies focused on transferability — we’ll open separate threads for staking, delegation, and other mechanics.
When possible, share concrete examples from other protocols (e.g. Optimism, Gitcoin, Arbitrum, etc.), data, or risk models that can help guide the decision.

Above all, respect differing views — we’re stronger when we build collaboratively.

Thanks for helping shape the foundation of our protocol’s governance. Now, the floor is yours :studio_microphone:

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This post today is interesting. I’d like to give my opinion.

Is the Noon token non-transferable from the start? As you know, I’ve been following the project from the beginning and have participated in it. I’m in favor of it not being non-transferable, with conditions.

Because with conditions, well, Noon has the opportunity to build solid governance based on its values. Making $NOON non-transferable in the TGE helps:

1- Avoid plutocratic vote capture.

2- Encourage active participation, not speculation.

3- Protect the mission and the organic development of the community.

But I think this should come with clear commitments:

1- A transparent roadmap toward transferability.

2- Delegation and reputation from the early stages.

3- Attractive incentives for those who get involved from day 1, for the first ones, those who helped lay the groundwork.

I think drawing inspiration from models like Optimism or Gitcoin can be key or a good example to follow.

In my opinion, governance shouldn’t be sold to the highest bidder from the start. It’s built, and that takes time. I’m in favor of a gradual approach.

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Hey,

Appreciate you sharing your input and perspective! This definitely helps and I would that we would agree that this is our plan to do the 3 commitment you mentioned.

The goal is indeed a gradual approach if that’s the stance we take! Keep sharing feedback and we’ll our best to integrate and communicate as transparently as possible!

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i understand the concerns and motivation behind the proposal, and the aim to protect the protocol in the launch, yet i disagree with it; some thoughts and qs why (if i’m wrong in my arguments, willing to be corrected)

  • transferability allows new liquidity to enter the protocol (as stated in the writing), so avoiding this seems counterintuitive to create adoption, not only at investor, but at protocol level, in early stages where matters the most; how much current or initially limited investors could organically grow the protocol?
  • unlocked tge is the standard in this industry, why to set a barrier? i understand risks exposed and i’m aware of how tgs may become a sell-off, but this proposal (i might be wrong) feels like a mitigation at the cost of investors and early supporters
  • the success of solid projects in the space does not directly correlate to a token, we’ve seen a lot of solid protocols whose governance token falls 50+% in the first days/weeks after tge (even more or never return to launch price), but protocol still succeeds because its product has pmf, generates revenue, offers roi, and it’s composable in the space, not because of the tradable dynamics of its gov token
  • transferability conveys users/investors self-sovereignty, which is is part of the ethos of the industry and is expected at the core of any decentraised project
  • limiting transferability seems to me opposite to build community and creating empowerment; again, if the pmf is there, current and potential new investors/supporters will continue to use the protocol and the gov token, and i emphasise the dif between both
  • i agree and recognise the potential issues with the early governance, but again, there are other alternatives that have proven before like weighted voting, quadratic voting, quorum % to pass, locked gov to vote, etc.
  • if this was a risk detected in the project chart, the team could’ve presented this before starting the current public beta or in the early days, not when the tge is “around the corner” as it has been stated in socials
  • based on tg chat, my feeling is that native and curious defi users are finding the project very appealing and composable, this proposal might deter that perception

if the way to go is the phased roll-out, though i highly disagree with, a fair, clear and on-time schedule should be presented promptly

this writing is unfiltered in some sense, didnt give myself so much time to think deeper, yet is absolutely respectful to the team and the users

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Hey guys - Kirk with Alea Research here.

I wanted to give my take - pretty much in agreement with @tsukuyomi.

Composability is king in Defi, as is the feeling of being in “control” of your assets. So, in terms of trasnferability i dont view it as the right move nor does it deter negative price action in my view. IIRC Eigenlayer did something similar when they launched, price still tanked, for example.

However, i DO like that the team is thinking about the token and how to align long term holders & users of the platform vs short term actors. I think there are other ways to possibly accomplish this - things like Option tokens/vested token IE: oDOLO from dolomite or xGRAIL from camelot or esGMX from GMX. These mechanisms could be one to consider as well.

Token launches are basically their own product, so i think the team is taking the correct steps to think deeply about this and gather opinions from the community.

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I support keeping the NOON governance token non-transferable at TGE, with transferability enabled by the end of 2025. Reasons:

  • Prevents governance capture: Stops large capital from dominating
  • Reduces speculation: Avoids pump-and-dump
  • Encourages contribution: Ties governance to participation
  • Builds community: Fosters commitment
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Really glad this topic is being discussed — it’s honestly something I’ve been wondering about for a while.

Personally, I think starting with non-transferable governance tokens at TGE is the right move for Noon. Here’s my take:

  • It keeps things fair in the beginning. We’ve all seen what happens when whales buy up governance tokens early — it stops feeling like a community project and starts feeling like a hedge fund.
  • It encourages actual participation. If tokens can’t be sold or traded, people are more likely to engage and contribute because they care — not just to flip it later.
  • It gives the protocol space to grow without outside pressure. No hype, no dumping — just time to build.

That said, I get that some folks might feel limited without the ability to transfer. I think that’s why the phased rollout sounds like a solid plan — start with a focus on community, then open up once we’ve got strong norms and safeguards in place.

Looking forward to seeing what others think — this could really set the tone for how Noon evolves long-term.

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Yes, this is precisely why we’re leaning in the direction of making the token non-transferable. Our governance is critically important to our success. We fear that in this current environment, with so much mercenary capital hopping from project to project, if we can make users understand and appreciate the importance of our governance token, and the impact that it has, before the transferability and the token pumps and the price speculation etc etc get thrown into the mix - that will attract the best types of long term users to Noon.

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Thanks for your questions and comments, I definitely see where you’re coming from. We’ve certainly thought through all of these concerns - otherwise, we would have been remiss in our process! But it’s important for us to explain it to everyone. A few comments to the ones you made:

  1. transferability allows new liquidity to enter the protocol - Yes, we agree, which is why we have committed to making $NOON transferable by the end of 2025 (est.). But we want to attract long term users who see the benefit of a protocol like Noon - and who are comfortable waiting for transferability, not users who want to quickly monetise and move on. We understand that this is not for everyone, which is why we want to be upfront about this.
  2. unlocked tge is the standard in this industry - Yes, it is, but I don’t think the “industry standard” is sufficient of a reason to never deviate from it! In fact, that’s precisely why we’ve written this post, to help everyone understand why we are deviating from the industry standard - because it will make our protocol much more robust in the long run.
  3. (subpoint under last point) but this proposal (i might be wrong) feels like a mitigation at the cost of investors and early supporters - I wanted to make sure I addressed this, because it’s an important point. We have made sure that even if the token is non-transferable at TGE, early supporters will get excellent rewards and boosts during the non-transferable period. Investors - don’t matter to us, bc we don’t have any =)
  4. the success of solid projects in the space does not directly correlate to a token - We see this in projects where the governance token isn’t central to the project, I think. As we’ve said, we need the governance token to be quite central to Noon in the future - so we need to escape this narrative.
  5. transferability conveys users/investors self-sovereignty - We understand this, but again, we are not saying that the token will never be transferable. In fact, we have committed to making it so by the end of the year. There are trade-offs with every decision, and the temporary non-transferable time period we think is well worth while (based on the points above).
  6. limiting transferability seems to me opposite to build community and creating empowerment - This is something I disagree with. I am not sure why limiting transferability for a short period of time would stop a community from forming or disempower users. In fact, I think it builds a stronger community of long-term oriented users, and discourages mercenary capital. And all governance rights are still conferred in this temporary non-transferable period, so there is limited disempowerment for users.
  7. other governance ideas - yes, and these are not mutually exclusive, we will be doing this as well.
  8. Timing of this announcement - our public beta has been live for 4 months, and there is about a month to go before our TGE. We had not seriously started considering non-transferability until a few weeks ago. But totally agree, in an ideal world, we would have made this announcement earlier - we can only apologise for this.
  9. Users will find the protocol less appealing and composable - Yes, we understand there are downsides with this approach. But we trust that the users who find the protocol less appealing may be more short-term oriented. And composability of the Noon protocol as a whole will be impacted as little as possible - our core tokens, USN and sUSN, remain transferable and composable! I’ve also added a longer discussion on composability in my response below.

I really do appreciate points of view that do not agree with the direction that we are leaning towards - they’re invaluable in making sure we revisit our assumptions and decisions. So thank you very much for taking the time to write this down - I hope this has given you more colour about why we’re leaning towards making the $NOON token non-transferable (temporarily), and maybe even assuaged some of your concerns! Again, really appreciate your time and support.

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Thanks for this response, Kirk - much appreciate your time, and thoughtful response. In the long term, we’re trying to build something a little different with the $NOON governance token, which is why we’re leaning towards temporary non-transferability. Let me try and address some of the points you’ve brought up below?

  1. Composability is king in DeFi - yes, of course, this is the case. But should composability be king for all tokens? I would argue that for tokens where their (speculative) price, or monetary value drives token utility, then composability makes sense. There are a few tokens where interactions with other protocols also make composability important - but these are few and far between. We are debating making $NOON (temporarily) non-transferable PRECISELY because we do not want it to be looked at ONLY as a source of monetary value. We need the $NOON governance token to primarily. be about exactly that - governing the Noon protocol. Of course, we understand there may be price speculation - and we also have built out robust frameworks to directly reward our long-term governance token holders and governance system participants - but we think making $NOON non-transferable in the early days will allow users to understand the non-monetary utility attached to it, and encourage users who value this to seek us out.
  2. Other mechanisms can align long term holders - totally agree. The beauty is that none of these are mutually exclusive. Or rather - temporary non-transferability does not preclude adoption of some other mechanics. In fact, we plan to do exactly this - stay tuned for more details!

Overall, I do agree that token launches are looked at products in and of themselves - and sometimes almost independently of the protocols they are connected to. We want to bring that link much closer - ensure that $NOON holders understand and appreciate their value to the Noon ecosystem, and the utility of the $NOON token outside of its potential price.

That said, if we go down this road, we understand that this will not be the right fit for everyone. We have tried to make sure that users can estimate the value of their points (filling in their own assumptions) to understand the potential monetary value of their token awards - hopefully, this helps provide some level of clarity and transparency to users who are looking purely for monetary upside.

Hope that helps - and thank you very much for your thoughtful response!

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Thanks! Yes, these are some great reasons why we’re considering non-transferability. Our governance token is to govern our protocol - non-transferability should not have any impact on that!

Of course, we understand that there are some users who do not wish to participate in governance, etc etc - which is why, as you say, this phased approach will appeal to them.

Thank you for your thoughts!

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I agree that NOON TGE tokens cannot be transferred, which is good for the initial token and the original intention.

Staking NOON TGE can increase the airdrop NOON. Changing part of it to partial liquidity may achieve a good balance.

This will not affect the initial amount of TGE and can maintain some liquidity in the hands of better holders.

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Yes - we are indeed going to allow $NOON holders at TGE to stake their $NOON - this will provide them with more of the $NOON airdrop than simply claiming at TGE.

We want to make sure we reward our earliest users. Of course, we understand that delaying token transferability does not allow for immediate liquidity. But ensuring rewards during this period provides value to our longest term holders.

Thank you for your support!

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My bad.
I mean. :sweat_smile:

Staking NOON TGE can increase the airdrop NOON. Changing part of airdrop NOON to partial liquidity may achieve a good balance.

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Heyo Nooners, Jormpt here from DefiLlama Research. I’ve found it difficult to take a stance on this issue, both here with Noon and across DeFi.

We appreciate the thoughtfulness of Noon’s current direction and the broader intent to promote aligned, long-term governance.

That said, we’re torn on the question of transferability. On one hand, non-transferability acts as a powerful guardrail against speculation and plutocracy. But it also restricts participation from those who weren’t part of early airdrop cohorts or who want to engage with governance now and are willing to buy in.

In our view, if governance is meant to be broadly composable, this friction could have unintended consequences by limiting active contributors simply because they missed the earliest window.

At the same time, we recognise that much of Noon’s early messaging emphasised long-term alignment and anti-speculative design. Between the lack of external investors, extended team vesting, and recurring statements about fairness and user-first distribution, it is perhaps reasonable to infer that transferability would be limited at launch. A more explicit and open discussion earlier in the process (back when the first governance blog posts and community threads were published) would have helped set firmer expectations.

We also want to echo tsukuyomi’s point about self-sovereignty. Transferability is a key part of what gives tokenholders real agency, and limiting it risks diluting that sense of ownership. If the protocol succeeds in building something useful and composable, then aligned supporters will naturally want to contribute, participate, and hold the token regardless of short-term price moves.

Another consideration is how the protocol can grow organically without VC funding or a large early investor base. In this context, strategic partnerships may prove critical in scaling adoption, liquidity, and external engagement. It’s worth reflecting on how transferability decisions will impact those dynamics.

If there is room for compromise, perhaps delegation markets, option-style wrappers, or vesting mechanisms could help. These tools might preserve the spirit of non-transferability while still allowing newcomers to get involved.

Regardless of the final decision, we believe clarity on why transferability is being considered and what values or user groups Noon wants to prioritise in the first year would help align expectations across the community.

Curious to hear others’ thoughts, and grateful to the team for opening up this discussion.

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Thanks jormpt! This is a very thoughtful answer - and I believe we’ve taken this into consideration when making our proposal for temporary non-transferability. Let me address point by point:

  1. “non-transferability acts as a powerful guardrail against speculation and plutocracy” - agree, and this is a large reason for temporary non-transferability.
  2. “But it also restricts participation from those who weren’t part of early airdrop cohorts or who want to engage with governance now and are willing to buy in.” - disagree partially - “restricts” is incorrect. “Limits” would be correct - since potential new users who have missed the first airdrop can still participate in the protocol, earn $NOON via holding USN / sUSN, and become participants in the governance process. I think it’s very fair to ask those who hold governance power to actually participate in the underlying protocol itself - especially in the early days. As the non-transferability will be temporary, this will cease to be the case the moment we make $NOON transferable - but initially, I think it’s powerful to say that the only way you can influence governance is to participate in the underlying protocol.
  3. “A more explicit and open discussion earlier in the process (back when the first governance blog posts and community threads were published) would have helped set firmer expectations.” - Yes, and I think we’ve addressed this prior. We of course would have loved to have this discussion earlier in the process - but we only began to consider this a few weeks ago.
  4. “Transferability is a key part of what gives tokenholders real agency, and limiting it risks diluting that sense of ownership.” - I think in cases where the token relies heavily or exclusively on its monetary value, that is certainly the case. But we think it’s incredibly important for our governance token to be used to govern first - hence this decision. Agency within the context of Noon is maximised by participating in shaping the future of the protocol through governance. Of course, we understand that some users - both short term speculators and otherwise - may feel differently.
  5. “Another consideration is how the protocol can grow organically without VC funding or a large early investor base. In this context, strategic partnerships may prove critical in scaling adoption, liquidity, and external engagement.” - Agree, but I think that token transferability is not the only arrow in our quiver to accomplish these objectives!
  6. “If there is room for compromise, perhaps delegation markets, option-style wrappers, or vesting mechanisms could help. These tools might preserve the spirit of non-transferability while still allowing newcomers to get involved.” - We are certainly considering these mechanisms, and do not feel they are mutually exclusive with non-transferability. But importantly - I want to re-emphasise - it is a fallacy to equate non-transferability of $NOON as being exclusionary to newcomers. Any user can get involved - the exact same way as all users to date have gotten involved, by holding and using USN and sUSN.

Overall - much appreciate your note. Hope you understand that $NOON will be available to all under this proposal - just via participation, not purchase. And this will be temporary - to allow longer term users to influence our governance and way forward.

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