Neutrl Opens NUSD Redemptions at 51 Cents as Strata Junior Tranche Faces Wipeout

Neutrl has opened a redemption program whose Ethereum contract pays 0.51 $USDC per NUSD, giving holders an exit at a 49% shortfall to the token’s $1 reference value.

The rate is directly visible in Neutrl’s redemption contract: its `redemptionRate()` function returns 510000000000000000, an 18-decimal ratio equal to 0.51. Neutrl said NUSD and sNUSD holders may submit requests, receive $USDC and have the corresponding tokens burned, although its public announcement did not specify the conversion applied to sNUSD.

The same NUSD valuation is set to exhaust the first-loss buffer in Strata’s Neutrl market. Strata scheduled an update that, once executed, would write jrNUSD to zero and set the srNUSD/NUSD value at 1.23971. Withdrawals would settle in sNUSD at the revised share values, not directly in $USDC.

OAK Research raised a legal concern about the redemption terms. The firm said accepting the program requires users to waive recourse against Neutrl across all their tokens, even if they redeem only part of their holdings. Neutrl’s public announcement says users must sign an onchain message to verify wallet ownership and encourages them to review the applicable terms, but it does not describe the acknowledgment as a liability waiver. The portal was region-blocked during The Defiant’s reporting, preventing an independent review of the exact clause.

Liquid Reserves Cover Roughly Half the Listed Supply

The 51-cent rate closely tracks the gap Neutrl disclosed after pausing affected smart contracts. On Aug. 28, the protocol said it held approximately $27 million in available liquid assets, while additional strategy positions and their associated profit or loss were not liquid. At that time, Neutrl said it could not confirm the timing, amount or recovery value of those positions.

The CoinGecko page reviewed by The Defiant listed 53.39 million NUSD in circulating supply. On those figures, Neutrl’s disclosed liquid assets equaled about 50.6% of the listed supply, broadly matching the contract’s 0.51 redemption ratio.

CoinGecko displayed NUSD near $1, but said the token had not traded in the preceding 24 hours and that the figure reflected its last recorded price.

Neutrl attributed the freeze to “an issue affecting a position held within the strategy” that impaired the liquidity of part of its reserves. In its Aug. 28 disclosure, the protocol said the problem was not a smart contract exploit, hack or code vulnerability.

First-Loss Protection Runs Out

Strata’s srNUSD and jrNUSD tranches are exposed to the sNUSD held by the strategy contract. Under the loss allocation described by Strata, jrNUSD absorbs losses before srNUSD.

At a 0.51 NUSD reference value, Strata said the loss exceeds the junior protection. Its strategy contract held 1,569,767.937465 sNUSD against 1,347,230.397196 srNUSD outstanding. Following execution of the update, the contract calculations would allocate the entire sNUSD balance to senior holders and none to jrNUSD holders.

The scheduled srNUSD/NUSD value of 1.23971 is a contract accounting value, not a guaranteed cash recovery. Strata warned that contract-produced values may differ from amounts realizable by holders, and said withdrawals would settle in sNUSD.

Strata’s scheduling transaction was confirmed on Ethereum at 6:48 p.m. UTC on Sept. 17 with a 172,800-second delay, meaning the update could execute no earlier than 2:48 p.m. ET on Sept. 19. Strata said withdrawals would open after execution; deposits remain disabled.