PiggyBank, a yield protocol, has acknowledged a significant error in its LAB token basis trading, leading to a 15% decline in its USDC Vault. The protocol revealed that it had purchased and locked $100,000 worth of LAB tokens at a low price while shorting perpetual contracts for hedging. However, market manipulation and liquidity issues caused high hedging costs, prompting PiggyBank to close its short position to mitigate risks. The locked LAB tokens are now valued at $1.35 million but will be excluded from net asset value calculations until August 14th due to liquidity constraints. The situation has also impacted other assets, with SPYx and JitoSOL showing declines of 12% and 9%, respectively. PiggyBank plans to release a detailed report with follow-up measures next week. This development follows public scrutiny from on-chain investigator ZachXBT, who accused PiggyBank of controlling over 95% of the LAB token supply.
PiggyBank Faces LAB Token Trading Error, USDC Vault Drops 15%
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