LAB (LAB)

This feels wrong on so many levels.

@piggybank_fi used a 'Long Spot / Short Perp' strategy, but not the way you should and how they explain in their own documentation.

The result: Heavy losses (with the exact outcome yet to be known).

This is my breakdown of the situation 👇

▶️ WHAT HAPPENED?

Piggybank invested $100,000 (approximately 2% of its portfolio at the time) in a mid‑cap basis trade. However, instead of buying the underlying asset on the liquid market, it acquired locked $LAB tokens at a discount through an OTC (over‑the‑counter) desk. A perpetual short position was opened as a hedge.

The problem: The $LAB token experienced severe price manipulation, low liquidity, and deeply negative funding rates. This made maintaining the short position (hedge) too expensive and "economically irrational."

Piggybank had to close the short position to limit the risk of further losses. However, since the purchased $LAB tokens are locked until August 14, the spot position could not be sold at the same time. Pigg

Dear Community,

- One month ago, PiggyBank got into a new position for $100k (~2% of the portfolio at the time), as part of the strategy’s scope of deploying into mid‑cap basis trades.

- The strategy involved purchasing locked $LAB tokens at a significant discount through a Tier‑1 OTC desk and hedging that exposure through perpetual shorts. During the holding period, $LAB experienced violent manipulation, including chaotic price movements on thin liquidity, and deeply negative funding rates.

- Maintaining the hedge became economically irrational and would have caused us to cross our risk thresholds. We therefore decided to close our short to cap the downside.

- In accounting terms, the total value of our $LAB locked position is $1.35m at current prices. However, due to the illiquid nature of this position, Piggybank is excluding it from the NAV until the first unlock on August 14. Even though this is an evolving situation that could still generate substantial returns, this is the fairest and most transpar

yesterday, i saw a platform that offers yield on tokenized stocks use customer funds to buy $lab via otc

even worse, they hedged against the position hence causing their depositors more loses

there are a lot of credible builders in this industry

but folks like this makes it worse for everyone else

sad

for everyone clicking on chain

knowing the source of the yield, what strategies and protocols your funds are deployed into is far more important than the yield itself