Foresight News | April 25, 2025, 16:00 Neutrl, a stablecoin protocol, buys locked VC tokens at OTC discounts and hedges via shorts. But behind its “everything can be stablecoin” promise, are risks overlooked? Author: Alex Liu, Foresight News

**Project Overview: M−BackedStablecoin Disruptor∗∗OnApril17,syntheticdollarstablecoinprotocolNeutrlannounceda5 million seed round led by STIX and Accomplice, with participation from Amber Group, Figment Capital, Ethena founder Guy Young, and others. Its model mirrors Ethena’s USDe but with a twist: instead of perpetual funding rate arbitrage, Neutrl’s yield stems from OTC discount arbitrage on VC tokens.

The Mechanics: OTC Discounts + Short Hedging VCs and institutions often acquire tokens at steep discounts with multi-year lockups. Neutrl capitalizes on this by:

1. Buying locked VC tokens at OTC discounts (e.g., 50%+ for tokens vesting in 1 year).

2. Shorting equivalent tokens to hedge price volatility, locking in spreads.

Example: Buy 400 50900k,offsettingOTClosses.IfOMrises50150k, still netting $60k profit.

Risk 1: The Funding Rate Trap Heavy shorting could force Neutrl to pay exorbitant negative funding rates—up to 10% daily in extreme cases. Over multi-year lockup periods, these costs might erase OTC gains. Bull markets ease this via positive rates, but bear markets spell trouble.

Risk 2: The Infinite Margin Nightmare If token prices surge beyond 100%, shorts risk liquidation before OTC unlocks. Surviving requires infinite margin—a near-impossible feat. A short on a rallying token like TIA could backfire catastrophically.

The VC Dilemma: Why Sell Discounted Tokens? Why would VCs offload tokens instead of hedging themselves?

• Reputation risks: Shorting their own holdings could anger LPs.

• Market depth: Large VC positions (e.g., 10%+ of supply) exceed exchange liquidity, forcing OTC sales.

Conclusion: High-Risk Arbitrage in Stablecoin Clothing Neutrl’s model is essentially a leveraged hedge fund masquerading as a stablecoin. While its risk management may outpace retail traders, the protocol’s stability hinges on volatile funding rates and token unlocks. Like Ethena, it democratizes niche strategies but demands extreme caution.

Neutrl remains in pre-launch; interested users can join its waitlist via the official website.

Foresight News | April 25, 2025, 16:00 Neutrl, a stablecoin protocol, buys locked VC tokens at OTC discounts and hedges via shorts. But behind its “everything can be stablecoin” promise, are risks overlooked? Author: Alex Liu, Foresight News

**Project Overview: M−BackedStablecoin Disruptor∗∗OnApril17,syntheticdollarstablecoinprotocolNeutrlannounceda5 million seed round led by STIX and Accomplice, with participation from Amber Group, Figment Capital, Ethena founder Guy Young, and others. Its model mirrors Ethena’s USDe but with a twist: instead of perpetual funding rate arbitrage, Neutrl’s yield stems from OTC discount arbitrage on VC tokens.

The Mechanics: OTC Discounts + Short Hedging VCs and institutions often acquire tokens at steep discounts with multi-year lockups. Neutrl capitalizes on this by:

1. Buying locked VC tokens at OTC discounts (e.g., 50%+ for tokens vesting in 1 year).

2. Shorting equivalent tokens to hedge price volatility, locking in spreads.

Example: Buy 400 50900k,offsettingOTClosses.IfOMrises50150k, still netting $60k profit.

Risk 1: The Funding Rate Trap Heavy shorting could force Neutrl to pay exorbitant negative funding rates—up to 10% daily in extreme cases. Over multi-year lockup periods, these costs might erase OTC gains. Bull markets ease this via positive rates, but bear markets spell trouble.

Risk 2: The Infinite Margin Nightmare If token prices surge beyond 100%, shorts risk liquidation before OTC unlocks. Surviving requires infinite margin—a near-impossible feat. A short on a rallying token like TIA could backfire catastrophically.

The VC Dilemma: Why Sell Discounted Tokens? Why would VCs offload tokens instead of hedging themselves?

• Reputation risks: Shorting their own holdings could anger LPs.

• Market depth: Large VC positions (e.g., 10%+ of supply) exceed exchange liquidity, forcing OTC sales.

Conclusion: High-Risk Arbitrage in Stablecoin Clothing Neutrl’s model is essentially a leveraged hedge fund masquerading as a stablecoin. While its risk management may outpace retail traders, the protocol’s stability hinges on volatile funding rates and token unlocks. Like Ethena, it democratizes niche strategies but demands extreme caution.

Neutrl remains in pre-launch; interested users can join its waitlist via the official website.