stable coins

Story: Neutrl Freezes NUSD as $53.6M Synthetic Dollar Hits Reserve Trouble

By Sakamoto Nashi

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Strata Pulls Back Too. Neutrl isn't the only one sitting on its hands. Structured-yield protocol Strata suspended…

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What the Data Shows. Numbers from RWA.xyz put NUSD's market cap at approximately $53.6 million as of Friday, down 18.

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Warning Signs Were Already There. It's not like nobody flagged this. Back in February, risk-advisory firm BA Labs put out a report…

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Neutrl pulled the plug on NUSD. The decentralized finance protocol halted all minting and redemption for its synthetic dollar Thursday, citing unspecified issues with its…

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The announcement came with a short explanation and a lot of blanks. Neutrl said it took the step on legal advice while it evaluates the impact of whatever hit its reserves.

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NUSD had roughly $53.6 million in circulation at the time of the freeze.

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Neutrl isn't the only one sitting on its hands. Structured-yield protocol Strata suspended minting, redemptions, and related functions for contracts inside its Neutrl market,…

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For approved counterparties, the freeze means they can't exchange NUSD for backing assets until Neutrl finishes its assessment. That's a hard stop.

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The broader synthetic stablecoin space has always carried this kind of risk. Unlike fiat-backed stablecoins that sit on bank deposits, synthetic dollars rely on yield-bearing…

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Numbers from RWA.xyz put NUSD's market cap at approximately $53.6 million as of Friday, down 18.4% over the prior 30 days. Monthly transfer volume dropped 72.4% to $71.4 million.

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Despite everything, NUSD was still trading at around $0.9984. Close to the dollar, not exactly at it.

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Read also: Dollar Drops as Fed Rate Hike Bets Shrink Across Currency Markets

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Cointelegraph reached out to Neutrl for comment and hadn't heard back by publication time.

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It's not like nobody flagged this. Back in February, risk-advisory firm BA Labs put out a report classifying a proposed integration involving Neutrl as high risk.

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The report also got into the mechanics of how redemptions work. Direct redemptions were limited to KYC- or KYB-approved counterparties.

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