Neutrl's synthetic dollar delivers premium market-neutral yields by harnessing exclusive OTC market strategies.
By setting new standards in stability and transparency, Neutrl brings the next evolution in crypto-native yields, making private strategies accessible for everyone.
Security
Risk-Minimized Architecture
Independent Verification
Core smart contracts and major upgrades are reviewed by independent security experts prior to deployment, with all updates undergoing external audits to uphold the highest security standards.
Onchain activity and integrations are continuously monitored using industry-leading advanced threat detection systems. Abnormal behavior is proactively identified and routed through clearly defined escalation paths to ensure rapid response and operational oversight.
Custody & Key Management
Custody and settlement conducted through institutional-grade custodians, with operational keys and sensitive actions governed by policy-based approvals, strict access controls, and comprehensive audit trails aligned with institutional best practices.
Protocol Controls
Risk controls are designed to limit impact through predefined caps, automated guardrails, and clearly scoped emergency actions, all of which are intentional, auditable, and subject to formal oversight.
Infrastructure Security
Security extends beyond code to operational practices. APIs, deployments, secrets, and access management are subject to regular reviews, independent assessments, and ongoing testing to ensure controls remain effective through industry-leading security researchers.
Security partners are disclosed for transparency. Coverage may vary by product and over time.
Our Products
Stable, Transferable, Yield-Generating
NUSD. Designed for Capital Efficiency.
NUSD is an institutional-grade, DeFi composable synthetic dollar backed by delta-neutral strategies and other crypto assets.
Deposit or swap supported stablecoins for NUSD to enter the Neutrl system.
Stay fully liquid while preparing to earn yield through staking.
2 | Stake
Stake NUSD to mint sNUSD and activate liquid yield.
Your balance begins accruing yield immediately while remaining withdrawable.
3 | Commit
Neutrl allocates capital across market-neutral strategies like OTC hedging and basis trades.
Returns accrue to sNUSD holders without directional market risk.
OTC Arbitrage
Discounted entries from secondary market acquisitions generate an immediate unrealized gain, while systematic hedging maintains a delta-neutral portfolio.
Delta Neutral Hedging
Yield is generated from funding rate differentials and price spreads, without exposing the portfolio to directional market volatility.
Basis and Funding Arbitrage
Yield is captured from price gaps between spot and futures markets, while offsetting positions keep exposure market-neutral.
sNUSD. High Yield, Fully Transferable.
sNUSD is the liquid staking version of NUSD, acting as a high yield bearing account. It remains fully transferable with a high degree of DeFi composability.
This protocol differs from other stablecoins, like Usual or Ethena, in that yield is derived primarily from OTC Locked Tokens, where the delta is fully hedged, and the remainder of the portfolio is deployed to Liquid Strategies to maintain sufficient liquidity buffer in times of capital stress.
NUSD maintains its peg through delta-neutral strategies, onchain transparency, and overcollateralization:
• Delta-Neutral Hedging: Derivatives and perpetual futures offset directional risk, keeping NUSD stable during market volatility.
• OTC Discounts: Discounted OTC asset purchases provide a safety margin, supporting the peg even in challenging conditions.
• Duration Matching: The protocol aligns asset and liability durations to ensure sufficient liquidity for redemptions.
• Liquid Reserves: Stablecoins (e.g., USDT, USDC, USDe) and liquid delta-neutral positions back NUSD, maintaining stability under stress.
NUSD is fully backed by a diversified portfolio of assets designed to provide security, transparency, and resilience.
Portfolio Composition - NUSD is backed by a mix of:
• OTC-acquired crypto assets: Purchased at significant discounts, providing a higher margin of safety.
• Stablecoins (e.g., USDT, USDC, USDe): Highly liquid and composable within DeFi and CeFi ecosystems.
• Delta-Neutral Positions: Liquid positions that generate yield while mitigating directional risk.
Transparency: All assets are confirmed using a combination of ZK-proofs, custodian attestations, and third party audits.
Risk Management Framework: The protocol employs a robust risk management framework that includes stress testing, margin monitoring, and proactive position adjustments to protect the backing assets and ensure their security.
If NUSD temporarily loses its peg, the protocol has several mechanisms in place to restore stability:
• Market Incentives: Arbitrage opportunities naturally arise when NUSD deviates from its peg, incentivizing traders and market makers to buy or sell NUSD and redeem against USDC 1:1 to bring its price back in line with its intended value.
• Delta Hedging Adjustments: The protocol adjusts its derivatives and perpetual futures positions to rebalance the collateral portfolio and stabilize NUSD's value.
• Reserve Deployment: Liquid reserves, including stablecoins and delta-neutral positions, can be rapidly deployed to support the peg and meet redemption demands.
• Proactive Adjustments to Backing: If market conditions are extreme, the protocol may temporarily scale down exposure to volatile assets or rebalance its portfolio to prioritize stability over yield. The combination of these measures ensures that NUSD can recover its peg efficiently, even during periods of high market volatility.
While the locked token strategy involves longer-term, illiquid investments, the protocol mitigates these risks through careful design, liquidity management, and diversification:
• OTC Discounts: Locked tokens are purchased at discounts, providing a safety margin even in adverse markets.
• Delta-Neutral Hedging: Market risk is reduced through hedging strategies, limiting exposure to price fluctuations.
• Diversified Portfolio: Locked tokens are balanced with liquid assets like stablecoins and delta-neutral positions, ensuring operational liquidity.
• Secondary Market Access: Partnerships with OTC brokers and secondary markets enable asset liquidation to generate additional liquidity.
Introducing Neutrl - A New Real Yield-Bearing Synthetic Dollar
article
Introducing Neutrl - A New Real Yield-Bearing Synthetic Dollar
June 10, 2025
The idea behind Neutrl is simple: crypto has deep asymmetric trading yield, but it’s only accessible to market makers and hedge funds. We’re unlocking defi users users access to this source of yield.
Stablecoins have shown to have one of the best product market fits in crypto and DeFi, facilitating trillions in onchain value transfer, collateralization, and liquidity. Yet, the stablecoin sector faces a problem: users want both stability and real yield, but most solutions force a trade-off between the two. We’re introducing @Neutrl_labs - a protocol designed to bridge this gap with a fully-backed, yield-bearing synthetic dollar that leverages real market inefficiencies, not token inflation.
The Stablecoin Trilemma: Stability, Yield, and Transparency
Most stablecoins fall into two camps:
Fiat-backed (USDC, USDT): Stable, but rarely offer meaningful yield, and rely on off-chain trust.
Algorithmic/DeFi-native (DAI, FRAX): Experiment with decentralized backing, but have struggled with volatility, scalability, or unsustainable yield models.
Protocols that do offer yield often do so via:
Lending to risky DeFi borrowers (often opaque counterparty risk)
Unhedged exposure to onchain risk (under-collateralization, LP risk)
Neutrl was designed to address these pitfalls with a robust, two-pronged yield engine rooted in established trading strategies, capital efficiency, and transparent risk management.
How Neutrl Generates Yield: Two Proven Strategies
1. OTC Arbitrage
Neutrl is tokenizing access to the most scalable high, market-neutral yield source: OTC arbitrage.
By leveraging OTC arbitrage, liquid funding rate inefficiencies, and DeFi-native market-neutral strategies, $NUSD provides tokenized access to yield-generating opportunities traditionally only reserved for institutions and crypto elites..
OTC arbitrage the main pillar of Neutrl’s yield comes from private market inefficiencies:
Mechanics: Neutrl sources tokens or SAFTs (Simple Agreements for Future Tokens) OTC at a discount to spot or expected market price. Immediately upon purchase, the protocol opens a corresponding short perp position as a hedge, effectively locking in the discount as a fixed yield over the vesting period.
Rationale: Early-stage projects often sell tokens at a discount to investors in exchange for lockup periods. By hedging, Neutrl removes directional price risk and treats the discount as yield.
Risk Management: This strategy is less liquid and exposes Neutrl to counterparty risk (project default, delayed unlocks), funding uncertainty, and potential short squeezes. To mitigate, Neutrl performs deep due diligence, uses legal agreements or smart contracts to enforce delivery, and maintains a substantial liquidity buffer via the more liquid basis arbitrage pool.
2. Crypto Basis Arbitrage
One of the most consistent sources of yield in the crypto derivatives market is the “basis”, the difference between the spot price of a token and its perpetual futures price. Crypto perpetual futures are often in Contango (the futures trade at a premium to spot), and this inefficiency is present across a wide spectrum of crypto assets, from blue-chip tokens to more illiquid, long-tail assets.
Mechanics: Neutrl allocates capital to go long spot and short perp on a range of crypto assets. While the protocol actively participates in basis trades on top tokens (e.g., BTC, ETH, SOL), it also extends further out the risk curve to include select long-tail assets, where funding rates can be even more attractive due to lower liquidity and increased leverage demand.
Rationale: By capturing basis premiums across both major and minor tokens, Neutrl diversifies its yield sources and can access higher, less-correlated funding opportunities. Longer-tail assets often have persistent positive basis due to speculative activity and market structure inefficiencies.
Risk Management: All positions are managed to remain delta-neutral, minimizing directional price exposure. Neutrl monitors funding rate trends, market liquidity, and counterparty risk across multiple exchanges, and dynamically adjusts allocations to optimize for yield and liquidity needs. In times of market stress or increased redemption demand, the protocol prioritizes liquidating top token basis positions first, preserving stability.
Dynamic Capital Allocation: Managing Liquidity & Redemption Risk
A core challenge for any yield-bearing stablecoin is balancing liquidity and yield. OTC positions offer higher yield but are illiquid; basis trades are more liquid but may have lower returns and are sensitive to market cycles.
Capital Buffer: Neutrl maintains a capital buffer on liquid basis arbitrage strategies, ensuring sufficient liquidity for redemptions and to handle market shocks.
Dynamic Allocation: The protocol dynamically shifts capital between strategies based on current liabilities, redemption activity, and market conditions.
Shorter-term liabilities: Covered by the basis arbitrage pool.
Longer-term liabilities: Matched by OTC/SAFT positions.
Redemption Management: In periods of high redemptions, Neutrl can rapidly unwind basis trades to meet outflows, while longer-term assets are gradually realized as they vest, or unwound in the secondary market.
Transparency and Risk Controls
At Neutrl, we believe that robust risk management and full transparency are non-negotiable foundations for any yield-bearing stablecoin protocol. To this end, we’ve implemented a multi-layered approach to risk controls and real-time user visibility.
Real-Time Transparency
On-Chain Reporting: Users will be able to monitor Neutrl’s aggregate positions in real time via our public dashboards. This includes details on open positions, funding and P&L breakdowns, OTC allocations, and liquidity coverage ratios.
Risk Metrics: We publish risk metrics such as daily VaR (Value at Risk), stress-tested scenario models, counterparty exposures, and asset concentration. This empowers users to make informed decisions and to assess the protocol’s risk profile at a glance.
Audits and Disclosures: All core smart contracts are audited by leading cybersecurity firms, and Neutrl will provide regular third-party attestation reports on custodial assets and off-chain arrangements.
Counterparty Risk Minimization
Exchange Risk: Off Exchange Settlement (OES) Solutions
Counterparty risk against centralized exchanges is one of the biggest threats to delta-neutral and basis arbitrage strategies. Neutrl addresses this by minimizing hot wallet exposure and utilizing Off Exchange Settlement (OES) via industry-leading custodians:
Fireblocks, Copper, and CEFFU: By leveraging these custody solutions, Neutrl’s assets remain under independent custody, even while being used to trade on exchanges. OES solutions enable the protocol to post collateral and settle trades directly from secure custody accounts, drastically reducing the risk of loss in the event of an exchange insolvency, hack, or operational failure.
Settlement Workflow: Funds are only transferred to exchanges when trades are executed, and unused capital remains within cold or segregated custody at all times, further reducing operational risk.
OTC/SAFT Risk: Smart Contract Vesting and Custodial Escrow
Counterparty risk in OTC or SAFT transactions, where Neutrl acquires tokens at a discount, is mitigated through strict settlement controls:
Smart Contract Vesting: Whenever possible, Neutrl negotiates for tokens or SAFT allocations to be delivered via audited smart contract vesting schedules. This ensures that the delivery and release of tokens are governed by transparent, immutable code, eliminating manual intervention and reducing the risk of non-delivery or mishandling by counterparties.
Escrow with Qualified Custodians: For deals where smart contract vesting is not feasible, Neutrl requires escrow arrangements with qualified institutional custodians such as BitGo, Anchorage, and CEFFU. These custodians hold the underlying assets and only release them according to the agreed-upon vesting or release schedule, providing an additional layer of legal and operational protection.
Due Diligence & Legal Frameworks: Every OTC/SAFT counterparty undergoes comprehensive KYC and due diligence, and transactions are structured with enforceable legal agreements to provide recourse in the event of default or dispute.
Additional Risk and Control Mechanisms
Diversification: Positions are diversified across multiple exchanges and asset classes to avoid concentration risk.
Redemption Liquidity: Capital buffers in liquid markets are maintained to support user redemptions under all market conditions.
Governance and Escalation: Protocol parameters (e.g., maximum exposure per counterparty or position, buffer ratios) are governed by transparent onchain voting with emergency escalation paths for rapid response in adverse scenarios.
Continuous Stress Testing: The protocol runs ongoing simulations to model the impact of extreme market events, exchange failures, or OTC defaults, allowing pre-emptive adjustments to capital allocation and risk limits.
Why Now? The DeFi Context and the Case for Neutrl
Stablecoins are the beating heart of DeFi, powering trading, lending, payments, and onchain economies. But while stablecoin market caps continue to grow, the reality is that the majority of “yield” available to stablecoin holders today is fundamentally unsustainable, opaque, or out of reach for most users. The current moment is a turning point for both technology and user expectations. A perfect time for Neutrl’s approach.
Unsustainable Yield Models Dominate On-Chain
For most DeFi users, the top source of stablecoin yield has been protocol incentives: projects minting and distributing their own governance tokens as rewards for liquidity provision or lending. This model creates the illusion of high yields, but in practice, these returns are paid from token inflation, not genuine economic activity. As protocols mature and emissions decline, so too does yield often leaving latecomers holding the bag when token prices collapse.
Even many “blue chip” DeFi protocols rely on circular incentives or uncollateralized lending, exposing users to hidden risks and systemic vulnerabilities. The hunt for real, organic yield generated from actual market opportunities remains largely unfulfilled for everyday stablecoin holders.
Democratizing Institutional-Grade Yield
One of the most consistent, attractive sources of yield in crypto is the OTC discount arbitrage opportunity: buying tokens or SAFTs at a discount from projects or early investors, and hedging the exposure to lock in the spread as yield. Historically, this strategy has been the exclusive domain of large hedge funds, market makers, and well-connected institutions. These players have the relationships, legal infrastructure, and risk management capabilities to negotiate and execute these deals, leaving retail and smaller institutions locked out.
Neutrl is changing that.
By pooling user capital and deploying it into vetted OTC and SAFT opportunities - always paired with robust hedging and custody controls -Neutrl brings this “institutional alpha” to the onchain world. For the first time, individual users and DAOs can access a durable yield stream that has previously been walled off by high minimums, private networks, and regulatory complexity.
Advances in Infrastructure Make This Possible
Until recently, democratizing such sophisticated yield strategies would have been technologically and operationally infeasible. But new infrastructure has changed the playing field:
Off Exchange Settlement (OES) via custodians like Fireblocks, Copper, and CEFFU now allows protocols to participate in CEX-perp strategies without taking on exchange counterparty risk.
Smart contract vesting and custodial escrow enable trust-minimized participation in OTC deals, ensuring delivery of tokens and minimizing default risk.
These advances allow Neutrl to operate with the safety, transparency, and operational rigor traditionally reserved for large institutions.
Pragmatic Risk Management and Transparency Are Now Essential
Recent events have made the risks of opaque, under-collateralized, or poorly governed protocols painfully clear. Today’s users expect:
Transparent reporting of strategy, risk, and performance
On-chain verification of assets and liabilities
Institutional-grade custody and legal recourse
Neutrl’s approach is built for this new era: every yield source is disclosed, every risk carefully managed, and every major asset secured by best-in-class custodians and onchain controls.
A New Cycle for Real Yield, Not Just Speculation
As DeFi matures, the focus is shifting from speculative “number go up” narratives to sustainable, productive use of capital. The next generation of DeFi protocols will be those that can generate real yield , not through inflation, but through capturing enduring market opportunities and sharing those returns with users in a transparent, risk-controlled manner.
Join the Neutrl Revolution
Neutrl is launching at a time when the market is demanding more: real, sustainable yield; access to institutional strategies; and uncompromising transparency. We’re here to deliver that, democratizing yield, raising the bar for risk management, and helping stablecoin holders finally put their capital to work in a way that’s truly sustainable.
We just getting started, but our vision is clear: to create the most transparent, sustainable, and user-friendly yield-bearing synthetic dollar in DeFi. Over the coming weeks, we’ll be sharing deep dives into our strategies, risk management, and what sets Neutrl apart.
