Possible cargo protein of a type 1 encapsulin nanocompartment involved in protection against oxidative stress (Probable). Catalyzes the conversion of 7,8-dihydroneopterin to 6-hydroxymethyl-7,8-dihydropterin, 7,8-dihydromonapterin and 7,8-dihydroxanthopterin, respectively, in equal quantities. After longer incubation times the only product is 6-hydroxymethyl-7,8-dihydropterin (PubMed:23150985, PubMed:24855650). Retains aldolase activity when encapsulated with a slight decrease in rate. It is not known if this protein is normally found in the encapsulin nanocompartment (PubMed:24855650). 7,8-dihydroneopterin = 6-hydroxymethyl-7,8-dihydropterin + glycolaldehyde 7,8-dihydroneopterin = 7,8-dihydromonapterin 7,8-dihydroneopterin + O2 = 7,8-dihydroxanthopterin + formate + glycolaldehyde + H(+) kcat is 0.0054 sec(-1) for the aldolase reaction with 7,8-dihydroneopterin as substrate. kcat is 0.006 sec(-1) for the aldolase reaction with 7,8-dihydromonapterin as substrate. kcat is 0.0015 sec(-1) for the epimerization of 7,8-dihydroneopterin. kcat is 0.0011 sec(-1) for the oxygenation reaction of 7,8-dihydroneopterin. Cofactor biosynthesis; tetrahydrofolate biosynthesis; 2-amino-4-hydroxy-6-hydroxymethyl-7,8-dihydropteridine diphosphate from 7,8-dihydroneopterin triphosphate: step 3/4. Homotetramer in the absence of substrate. Homooctamer in the presence of substrate. Forms an approximately 6 nm diameter cargo inside the encapsulin nanocompartment, would be similar to the size of the homotetramer or homooctamer. The C-terminus (residues 119-133) targets the protein to the encapsulin nanocompartment. Was identified as a high-confidence drug target. Cloning (to improve crystallization) removed residues 121-133 which corresponds to the target-loading peptide for the encapsulin nanocompartment. Target peptide removal does not change enzyme activity. Belongs to the DHNA family.