PiggyBank reveals LAB token basis trading loss of $579000 and promises compensation

PiggyBank released a report on the LAB incident on June 6th, stating that the agreement experienced a net drawdown of approximately $579000 due to market manipulation in LAB token basis trading. PiggyBank purchased 142800 locked LAB tokens (approximately $102500) through an OTC intermediary in early May and opened a perpetual contract short hedge. Market participants maintained spot prices above perpetual contract prices, resulting in an annualized funding rate of -17000% and hedging costs forcing short positions to close, resulting in a loss of approximately $476000. The spot value of LAB tokens related to lock up is approximately $1 million, which has been removed from the NAV calculation due to poor liquidity and no hedging. PiggyBank promises to compensate damaged users.