Key facts
- Neutrl has suspended minting and redemptions for its NUSD synthetic dollar.
- The protocol cited unspecified circumstances affecting protocol reserves.
- Neutrl has paused other protocol functions on legal advice.
- Strata, a structured-yield protocol, has also paused related functions for contracts in its Neutrl market.
- NUSD had a market capitalization of approximately $53.6 million.
The decentralized finance protocol Neutrl has suspended the minting and redemption of its NUSD synthetic dollar due to unspecified circumstances affecting its reserves. The protocol announced on Thursday that it had also paused other functions on legal advice while it assesses the situation, leaving the exact cause and the extent of any potential impairment unclear. Neutrl did not specify the affected asset or counterparty, nor did it provide a timeline for resuming operations.
Following Neutrl's announcement, structured-yield protocol Strata stated it had paused minting, redemptions, and related functions for contracts within its Neutrl market, which supports several NUSD-linked products. Strata confirmed that its other markets remain operational.
With approximately $53.6 million in NUSD currently in circulation, the suspension prevents approved counterparties from exchanging the token for its backing assets. Neutrl indicated it would provide further updates on timing and next steps when available.
Data from RWA.xyz shows that NUSD's market capitalization has fallen by 18.4% over the past 30 days to about $53.6 million, with monthly transfer volume decreasing by 72.4% to $71.4 million. However, this data does not confirm a link to the current reserve issue. NUSD is designed to track the US dollar using yield-bearing crypto assets and market-neutral strategies, rather than traditional bank deposits. It was trading around $0.9984 with 615 holders and 347 active addresses in the preceding 30 days.
In May, the verification platform Accountable stated its Neutrl dashboard provided continuous cryptographic proof that NUSD reserves matched liabilities. However, a February assessment by risk-advisory firm BA Labs had classified a proposed Neutrl integration as higher risk due to counterparty, operational, and liquidity exposure. At that time, BA Labs estimated NUSD supply at $226 million and reserves at $233.7 million, indicating a collateralization ratio of 103.6%. The majority of reserves, over 87%, were held through Fireblocks, with smaller amounts on centralized exchanges.