Neutrl Opens NUSD Redemptions at 51 Cents as Strata Junior Tranche Faces Wipeout
Neutrl has launched a redemption program that lets NUSD holders redeem tokens for 0.51 USDC each via an on-chain contract, reflecting roughly a 49% shortfall to the token's $1 reference. Separately, Strata scheduled a valuation update that would write its junior tranche (jrNUSD) to zero and set an srNUSD/NUSD accounting value of 1.23971, with withdrawals to settle in sNUSD at the revised share values.
Why It Matters
The redemption rate and Strata's update reveal that Neutrl's liquid reserves cover only about half of NUSD's listed supply, triggering the exhaustion of first-loss protection and effectively wiping out jrNUSD holders. The moves also raise legal and transparency questions about the redemption terms and the recoverability of non-liquid strategy positions.
Key Facts
- redemption rate: 0.51 USDC per NUSD (redemptionRate() = 510000000000000000)
- reported liquid assets: $27 million (disclosed Aug. 28)
- NUSD circulating supply (CoinGecko): 53.39 million
- approximate coverage of listed supply: 50.6% (liquid assets / listed supply)
- Strata scheduled update confirmed: Ethereum tx confirmed Sept. 17 at 18:48 UTC with 172,800-second delay
Neutrl opened an on-chain redemption program that currently pays 0.51 USDC for each NUSD redeemed. The redemption rate is visible in the contract via its redemptionRate() function, which returns 510000000000000000, an 18-decimal ratio equal to 0.51. The protocol said holders of NUSD and sNUSD can submit requests, receive USDC, and have the corresponding tokens burned; the public announcement did not detail how sNUSD converts under the program.
The 51-cent exit closely matches figures Neutrl disclosed after pausing certain smart contracts. On Aug. 28 the protocol reported about $27 million in available liquid assets while additional strategy positions remained illiquid or of uncertain recoverable value. CoinGecko listed 53.39 million NUSD in circulating supply, which on those figures makes the disclosed liquid assets roughly 50.6% of the listed supply — broadly in line with the 0.51 redemption ratio. CoinGecko also showed NUSD near $1 but noted the token had not traded in the prior 24 hours.
Strata — whose srNUSD and jrNUSD tranches are exposed to sNUSD held in the shared strategy contract — scheduled a 48-hour valuation update intended to reprice holdings inside the contract. Once executed, the update would write jrNUSD to zero and set the srNUSD/NUSD accounting value at 1.23971. According to Strata’s loss-allocation rules, junior tranche tokens absorb losses first; at the 0.51 NUSD reference the loss exceeds the junior protection, so the contract calculations would allocate the entire sNUSD balance to senior holders and none to jrNUSD holders.
Strata cautioned that the srNUSD/NUSD figure is a contract accounting value and not a guaranteed cash recovery, and said withdrawals would settle in sNUSD at the revised share values rather than directly in USDC. The scheduling transaction for the update was confirmed on Ethereum at 18:48 UTC on Sept. 17 with a 172,800-second delay, making the earliest possible execution 14:48 ET on Sept. 19; Strata said withdrawals would open after the update executes and that deposits remain disabled.
The redemption terms also prompted legal scrutiny. OAK Research flagged that participating in Neutrl’s program appears to require users to waive recourse against Neutrl across all their tokens even if they redeem only part of their holdings. Neutrl’s announcement says users must sign an on-chain message to verify wallet ownership and encourages review of applicable terms, but the public post did not explicitly label the acknowledgement a liability waiver. During reporting, The Defiant found the redemption portal region-blocked, which prevented independent inspection of the exact contractual clause.
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