Neutrl Liquidity Problem Highlights Lulo’s Boost Deposit Risk

Boost deposits face a roughly 6.4% drawdown from Neutrl exposure, while Protected deposits remain unaffected under Lulo’s first-loss coverage design. The figures describe different sides of Lulo’s deposit structure: Boost capital takes losses first, while Protected deposits receive coverage. Boost depositors earn additional yield by providing coverage for Protected depositors. When a covered protocol incurs a loss, the Boost pool absorbs it before Protected capital is affected. Neutrl is among the protocols in Lulo’s deposit allocations. Neutrl paused minting, redemptions and other protocol functions after a strategy position affected liquidity in part of its reserves.

Source: TokenPost