PiggyBank has announced plans to compensate users affected by a $579,000 loss due to market manipulation in a LAB token basis trade. The incident, detailed in a report released on June 6, involved the purchase of 142,800 locked LAB tokens and a hedging strategy that backfired due to a sustained negative funding rate. This led to a $476,000 loss when the short position was closed. The locked LAB tokens, now valued at approximately $1 million, are excluded from NAV calculations due to liquidity issues. To address the fallout, PiggyBank will implement structural reforms, enhancing transparency and phasing out certain trading strategies. Affected users will receive USDC compensation based on their losses, funded by NAV differences, future LAB sales, and 50% of future platform revenue. Compensation eligibility is based on a June 6 snapshot of users.
PiggyBank to Compensate Users After $579,000 Loss in LAB Trading Incident
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