Lulo Expects 6.4% Drop in Boost Deposits After Neutrl Losses

Lulo expects its Boost deposits to decline about 6.4% after losses at Neutrl Finance affected a yield strategy, while principal in its Protected deposits remains unaffected.

Boost is designed to bear risk for Protected deposits. Under that arrangement, Boost capital absorbs losses from an affected protocol before they reach Protected deposits. Lulo expects the impact of the Neutrl exposure to remain confined to Boost.

Neutrl Finance operates a synthetic dollar protocol on Ethereum. Losses in its strategy positions weakened reserve liquidity, and redemptions have opened at about $0.51 for each $1 of value. That rate describes what Neutrl holders can recover through the redemption program; the 6.4% figure describes the expected decline in Lulo's Boost deposits. The figures apply to different pools of funds.

Lulo said the incident did not result from a hack or an exploited smart contract vulnerability. It plans to release further updates.