PiggyBank Admits User Losses in Manipulated LAB Token Trade

PiggyBank, a DeFi yield protocol, has admitted to user losses caused by market manipulation in its LAB token basis trading strategy. The protocol invested around $100,000 in LAB tokens at a discounted price through an OTC channel and opened a perpetual short as a hedge.

However, the LAB token faced 'violent manipulation,' thin liquidity, and deeply negative funding rates that made maintaining the short economically irrational. PiggyBank closed the hedge to limit further losses.

The locked $LAB position is currently valued at roughly $1.35 million using market prices, more than 13x the entry, but PiggyBank has excluded it from net asset value calculations until August 14.