Neutrl opens NUSD redemptions as contract reads 0.51

Neutrl has opened an early redemption program for NUSD and sNUSD holders on Sept. 17, allowing eligible users to exchange their tokens for $USDC after a reserve-liquidity problem halted normal protocol operations in August.

Neutrl said holders can connect the wallet containing their NUSD or sNUSD, sign an on-chain message to prove wallet ownership and review the applicable redemption details before submitting a request. Completed redemptions pay users in $USDC and burn the corresponding NUSD or sNUSD.

The company did not state a recovery percentage in the announcement. Structured-yield protocol Strata subsequently examined the deployed redemption contract and reported a redemptionRate() value of 510000000000000000, equivalent to a 0.51 reference rate.

NUSD redemption contract points to a 0.51 rate

Strata identified the redemption contract as 0xB3f07D3392102fC23264a78e2A1A8B6421123828 and said the rate visible on-chain was 0.51. The reading supports claims that holders currently face a payout close to half of NUSD’s original $1 reference value, though Neutrl has not described the program publicly as a 50% recovery.

A separate report said Strata treated the contract value as the observable redemption reference under the current program. Eligibility, final payout details and availability remain subject to terms set by Neutrl operator Caverna Auctus Inc.

Neutrl’s own announcement states only that the redemption rate is fixed and based on the liquid reserves previously disclosed by the protocol. Users receive the exact applicable details through the portal before submitting their request.

The program is expected to remain open until Nov. 14, 2026. Neutrl describes that date as an expected deadline subject to applicable terms, meaning it has not presented the date as an unconditional guarantee.

One X user separately claimed users can recover “around 50%” and must accept a “liability waiver.” The first part is broadly consistent with the 0.51 contract reading reported by Strata. No public Neutrl statement or indexed copy of its redemption terms reviewed for this report confirmed the claimed liability-waiver requirement.

Neutrl had disclosed $27 million in liquid reserves

The redemption program follows a reserve problem first disclosed in August. Neutrl said it discovered an issue involving a position held within its strategy that affected the liquidity of part of its reserves.

After consulting legal advisers, the protocol paused affected smart contracts. Neutrl specifically said the incident was “not the result of a smart contract exploit, hack, or code vulnerability.”

By Aug. 28, the protocol disclosed approximately $27 million of available liquid assets. Other strategy positions remained on its books with associated gains or losses, but Neutrl said they could not be liquidated at that stage.

Management said it could not confirm the timing, total amount or recovery value associated with the illiquid positions. Unwinding the remaining positions was expected to take time, leaving the value of any later recoveries uncertain.

The $27 million figure came after the protocol had reported a much larger reserve base earlier in the year. As earlier reserve suspension coverage reported, Neutrl’s dashboard showed roughly $91 million in assets against about $90 million of NUSD as of June 21 before its detailed reserve display was later placed under recalculation.

A separate June snapshot cited by on-chain researchers put the reserve book even higher at roughly $137 million at an earlier point. That figure predates the August freeze and should not be treated as the protocol’s asset value when redemptions opened.

Burn mechanics reduce supply after redemption

Each successful redemption removes the surrendered NUSD or sNUSD from circulation. Neutrl says the tokens are burned after $USDC is paid to the holder, preventing redeemed units from remaining outstanding.

The portal requires users to sign a message to verify control of the wallet before they proceed. Neutrl cautioned holders to use only its official redemption URL because recovery programs can attract fake websites and malicious wallet-connection requests.

The company says the new redemption contract underwent review by a third-party security auditor. It has not named the auditor in the Sept. 17 public announcement reviewed for this report or published the audit report through the announcement itself.

Before opening the program, Neutrl said deployment depended on completing a new redemption contract, an independent audit and legal and financial reviews. Its earlier guidance had targeted early September, making the Sept. 17 launch later than the initial schedule.

Structured products built on NUSD are affected as well. Strata said a 0.51 valuation causes its jrNUSD junior tranche to be written down to zero under the Neutrl market structure, while the remaining value flows to the senior srNUSD tranche according to that product’s loss waterfall.

As previous coverage of NUSD supply conditions reported, NUSD circulation had already contracted sharply before the redemption launch, falling from roughly $226 million in February to about $53.6 million in August.

Secondary market prices offer little current signal

CoinGecko currently displays approximately 53.39 million NUSD in circulating supply and a reference price near $0.9983. The data provider warns that NUSD had not traded on its tracked exchanges for an extended period, meaning the displayed price represents an old recorded market value rather than an active price at which holders can currently exit.

For that reason, the near-$1 tracker quote should not be compared directly with the 0.51 redemption-contract reading as if both represented equally accessible markets. CoinGecko states that the token no longer has active trading pairs across its tracked venues.

The reserve issue is especially relevant to NUSD’s original structure. Neutrl marketed NUSD as a synthetic dollar backed through liquid stablecoins, OTC-acquired crypto positions and delta-neutral trading strategies instead of a portfolio limited to cash and Treasury securities.

Its April 2025 fundraising release described a strategy built partly around purchasing locked altcoins at discounts and hedging market exposure with perpetual futures. STIX and Accomplice led the $5 million seed round, with Amber Group, SCB Limited, Figment Capital and Nascent among the other investors.

The company said at launch that the structure could maintain liquidity while using positions normally associated with institutional OTC markets. That description was a company claim made before the 2026 reserve issue and does not establish the liquidity now available under the redemption program.

Neutrl has not provided a final valuation for the illiquid strategy positions or said whether later asset recoveries could produce an additional payment to holders who accept the current redemption program. Its current disclaimer says timing, amounts and recovery outcomes are estimates that can change without notice.