Overnight Finance

Overnight Finance is a decentralized protocol that issues fully collateralized, yield-bearing stablecoins — including USD+, USDT+, DAI+, USDC+, and ETH+ — each pegged 1:1 to its underlying asset. Users mint these "Tokens+" on the platform and automatically earn passive yield through a daily rebasing mechanism that increases their wallet balance while the token price remains stable. The protocol is designed for users seeking stablecoin-denominated yield without exposure to crypto price volatility, with products deployable across Optimism, Arbitrum, Base, Linea, and Blast.

Overnight Finance generates yield by taking the assets you deposit (like USDC or DAI) and putting them to work in several low-to-medium risk strategies, all managed automatically by smart contracts. The main strategy categories are:

• Lending to protocols like Aave — your stablecoins are deposited into lending markets to earn interest.
• Providing liquidity on exchanges — stablecoins are paired together in liquidity pools on platforms like Uniswap V3, Curve, Balancer, and others, earning trading fees.
• The Stable Coin Market Maker (SMM) — a custom strategy that places narrowly targeted orders in stablecoin pools to profit from tiny price movements between closely-paired stable assets.
• Exchange-Traded Strategies (ETS) — these are "delta-neutral" positions: the protocol borrows a volatile asset (like Wrapped ETH) against its stablecoins on Aave, then pairs that borrowed asset with a stablecoin in a liquidity pool. Automated bots keep the position balanced, so price swings in the volatile asset don't create a net gain or loss. The yield comes from trading fees, though there is some risk of "impermanent loss" (temporary loss from price movement) that the bots work to manage.

All fees and rewards earned from these strategies are converted into USDC. That USDC is used to mint new Tokens+, which are then given to holders through a daily rebase — your wallet balance simply increases each day. The protocol follows a "real yield" approach, preferring sustainable earnings from trusted protocols like Aave and Uniswap V3 rather than relying on temporary token incentives.

For the ETS strategies specifically, Overnight charges a performance fee of 20–50% of daily yield (the higher end covers the cost of frequent bot rebalancing). The protocol also has an insurance layer backed by its native OVN token, which absorbs first losses if a "negative rebase" occurs — that is, when the value of the underlying assets drops below the value of all Tokens+ in circulation. This insurance lets the protocol safely pursue higher-yield strategies.

The rebase can be positive (when asset values exceed the tokens) or negative (when they fall short). A policy called "Net Asset Value of 1" keeps the system pegged: the total market value of assets must always match the total tokens in circulation. Yield is not guaranteed — it changes daily based on strategy performance and can go negative.

Overnight Finance's official website lists the following investors/backers in the "Our valued investors" section: individual angel investors Sandeep Naiwal (co-founder of Polygon), Ryan Selkis (founder of Messari), Brian Tubergen, and Paul Holland; alongside institutional investors Hack VC and FJ Labs. The protocol's tokenomics documentation further discloses that "Pre-seed investors" received 8.5% of the total OVN token supply (1,000,000 fixed supply) with a 6-month cliff followed by 24-month linear vesting, and a "Pre-sale" round comprised 2.5% of supply with 25% unlocked at sale end and 75% over 4 weeks linear vesting. No specific funding amounts, round sizes, or dates for these investments are disclosed on the official website or documentation.